The sustained rise in long-term rates in January has stabilized for the moment, and its causes are becoming clear.
Mortgages have risen from 3.50 percent or below in the prior five months to roughly 3.75 percent, and the almighty 10-year T-note from a centerline near 1.75 percent to almost 2 percent.
The rise has been puzzling.
The Fed committed just last fall to buy $40 billion a month in mortgage-backed securities to keep mortgage rates down. Then in December, the Fed announced it would continue buying $45 billion in long-term Treasurys each month.
The stated purpose of both programs -- which together are increasing the Fed's holdings of long-term securities by $85 billion a month -- was to hold rates down until our economy turns sharply better. Which it hasn't.
Today's employment report had its usual ambiguities. Optimists and the White House are pleased at 157,000 new "non-farm payroll" jobs, and the November-December upward revision of another 127,000.
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