Market Volatility Leaves Lenders Wary
October 22, 2014
Lenders reacted cautiously to the financial market volatility this week, after a sharp drop in the stock market touched off a massive rally in Treasury bonds.
Some securitization shops widened their loan spreads in reaction to softness in commercial MBS prices. But most lenders took a wait and see attitude.
Lenders were especially wary of locking in rates based on a sharp drop in Treasury yields. The 10-year bond’s yield plunged to as low as 1.86% briefly before rebounding to 2.16%.