504 Program Rate Update for August 2014 |
4.960% – 20 Year Debenture Effective Rate * |
Rates Wobble in a Low Orbit |
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The underlying 504 twenty year debenture rate came in virtually unchanged at 2.88%, from the prior month as a widening of the spread was largely offset by a further decline in the Ten Year Treasury.
Chart and Statistical Data is from September 2006 to August 2014
Since the late spring we have been at pains to point out that, supply and demand really do have an impact on the markets. With a rapidly shrinking Federal deficit, now some 24% below the prior year’s levels, the supply of Treasury debt is moderating. Given an improving economy evidenced by a sixth straight month of job growth in excess of 200,000, a feat last seen in 1997, the trend seems to have some momentum. Complementing this is a relative increase in demand for “safe haven” investments, due to a tragic range of global problems: most prominently a variety of wars and near epidemic disease. In short, the window to obtain long term and historically very low rates remains open. Our crystal ball does not provide a clear view as to when a point of inflection will come for interest rates, but come it will, “the readiness is all”. What better way to be ready than with the low long term rates of the SBA 504 program. We welcome the opportunity to earn your business. * Note: Rates are subject to credit determination & auction pricing. Past performance is no guarantee of future results. Share this message with the tools below. |
