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Politics Certainly Affect Us All

May 6, 2011

From, via my wonderful mortgage counselor, Christina Zulueta, comes this news about one way Osama bin Laden‘s death may affect us.

 “One factor that may contribute to keeping rates low for now is the fear of potential retaliation from terrorist groups after the death of Osama bin Laden. The United States kept its official threat level unchanged after the al-Qaida leader was killed in a U.S. raid in Pakistan this week, but security at many airports and subways was heightened. 

While the killing of bin Laden itself did not have a direct and immediate impact on rates, the threat of potential retaliation is likely to affect rates.  Any unexpected event, especially terrorism threats, tends to have a very deep impact on rates. It’s bad for the stock markets and good for the bond markets, and that normally leads to lower rates. 

That’s because during times of political uncertainty, nervous investors tend to pull money out of riskier investments, such as the stock market, and seek safer investments such as Treasury bonds. The higher demand for bonds causes yields to drop. Mortgage rates normally follow bond yields.”

Patty Cunningham, Realtor®
Coldwell Banker Preferred  
Exton, PA 19341
O.         610.363.6006  
C.         610.659.4669    
Lic #RS294054


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