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The article is full of jargon and unfamiliar abbreviations, it's quite hard to follow. I wonder what the target group is.
by colonwqbang 4y ago
The article is full of jargon and unfamiliar abbreviations, it's quite hard to follow. I wonder what the target group is.
- sideshowb 4y agoWelcome to the financial press. Can't predict the future but will sure try to hide that by explaining things as counterintuitively as possible.
- tylerrobinson 4y agoFor a typical business reader, these are pretty standard terms. Most people became familiar with MBS (mortgage-backed securities) during the last financial crisis, and CPI (consumer price index) is a way of reporting inflation. The article is saying that if inflation is at 8.6%, no one would want to lend money for a lower rate. The real return (which takes into account the purchasing power of the dollars lent) would be negative. The author gives evidence that there was a “no-bid” to buy debt at 5.5%. Buying debt is in effect another way of lending. Therefore, the author shows that no one wanted to lend at 5.5%, but were willing to lend at 6%. He concludes that this shows mortgage interest rates will go even higher. That’s not to say that anyone is born knowing these terms, just that they are not particularly exotic among all the acronyms floating around.