Morgan Stanley sees ten year @ 5.5% Does this imply 7+% mortgages?

Assuming 31% one year swaption the ten year, Looks like the market has priced in 68% probability of ten year being as high as 5% in a year, 95% within 6.2%.

Market isn't totally blind to an expected rise in rates, but this is not 100% priced in yet either.

Higher rates + increased taxes could give us the Obama/Geithner double dip we've been fearing.

hfscomm2

From same article:

Edward McKelvey, senior economist in New York at Goldman Sachs Group Inc., the top-ranked U.S. economic forecasters in 2009, according to data compiled by Bloomberg, expects yields to drop to 3.25 percent. Goldman Sachs says unemployment will average 10.3 percent in 2010, hindering the recovery.

And CC, when you are on your death bed looking back at all of your accomplishments in life, I hope spending all of your time on SE is not one of them, but I am afraid it will be