By: Dr K C Gupta, YBB Personal Finance

CONTRARIAN INDICATORS

AAII Bull-Bear Spread -21.5% (very low)
CNN Fear & Greed Index 54 (neutral)
NYSE %Above 50-dMA 68.41% (positive)
SP500 %Above 50-dMA 61.40% (positive)

ICI Fund Allocations (Cumulative), 7/31/25
OEFs & ETFs: Stocks 61.23%, Hybrids 4.14%, Bonds 17.51%, M-Mkt 17.12%

INTEREST RATES

CME FedWatch
Cycle peak 5.25-5.50%
Current 4.25-4.50%
FOMC 9/17/25+ cut
FOMC 10/29/25+ cut

Treasury

T-Bills 3-mo yield 4.08%, 1-yr 3.66%; T-Notes 2-yr 3.56%, 5-yr 3.63%, 10-yr 4.06%; T-Bonds 30-yr 4.68%;
TIPS/Real yields 5-yr 1.21%, 10-yr 1.70%, 30-yr 2.43%
FRNs Index 3.980%
US I-Bonds rate from 5/1/25 – 10/31/25 is 3.98% (previous 3.11%); the fixed rate is 1.10%, the semiannual inflation is 1.43%

Bank Rates www.depositaccounts.com/

Stable-Value (SV) Rates, 9/1/25
TIAA Traditional Annuity (Accumulation) Rates
Restricted RC 5.00%, RA 4.75%
Flexible RCP 4.25%, SRA 4.00%, IRA-101110+ 4.00%
TSP G Fund 4.250% (previous 4.375%)

Weekly ETFs INDA +1.28%, INDY +1.23%, EPI +1.19%, INDH +0.78%, SPY +1.57%

The data above are as of Sunday preceding the publication date.

IT/TECH

Amazon has acquired Indian fintech BNPL (buy-now-pay-later) lender Axio.

ECONOMY

US President TRUMP may change his mind & attend the QUAD Summit in India in November. Russian President PUTIN is expected to visit India in December.

EU’s approach is sanctions; US’ approach is trade tariffs. EU is also conflicted in that it continues to buy Russian oil & gas. So, the US pressure on EU to impose high tariffs on India & China may not come through.

US HIRE bill in Congress will restrict outsourcing & tax payments to foreigners. US outsourcing to India (& elsewhere) makes lot of news, but the reality is that India has trade deficit with US in services, while it has trade surplus in goods.

SPECIAL TOPICS

CORE Energy & US Flowserve/FLS will start production of nuclear reactor coolant pumps in India. This will add another vendor in this critical area for nuclear energy.

US Clean Core Thorium Energy (CCTE) has received US regulatory approvals for sharing thorium-enriched uranium fuel technology for pressurized heavy water reactors (PHWRs) with Larsen & Toubro & the National Thermal Power Corporation (NTPC).

MORTGAGES – RATES & POINTS

Mortgage loans are nonrecourse loans secured by the house. Traditional mortgages have fixed rates for 15- or 30- year terms. In addition, there may be points (1%-3% paid upfront) to buydown mortgage rates. Each 1% point may reduce the mortgage interest rate by about 12.5-25.0 bps (basis points; 100 bps is equivalent to 1%). Points are more likely to be charged when the mortgage market is tight & to discourage quick refinancing (re-fi). Online calculators (Bankrate, etc) can be used for mortgage loan calculations.

You may have to pay for private mortgage insurance (PMI) if the down payment is less than 20%. Mortgage insurance may also be available to pay up on early demise of the homeowner. It’s customized & expensive decreasing-term-life insurance. Mortgages are not transferable or assignable on sale.

If you itemize, mortgage interest (with some limitations) & property tax can be deducted on federal Schedule A. But many don’t itemize now due to high standard deductions.

Mortgages typically can be refinanced or prepaid without penalty. When mortgage rates fall, the re-fi volumes go up; when mortgage rates go up, the re-fi volumes go down. There are rules of thumbs about when to re-fi, but the best way is to determine how soon the savings from lower mortgage payments would cover the mortgage closing costs (including points). Homeowners are sort of locked in if mortgage rates rise a lot – if they move, the new mortgages would be at much higher rates.

Making a couple of extra payments per year can accelerate 30-yr mortgage payoff by 9-10 years. Include a letter of instruction to apply the extra payment to the principal balance; otherwise, it may just be held in escrows for future monthly payments.

There are also adjustable-rate mortgages (ARMs) & balloon mortgages (these have lower monthly payments, but the entire balance comes due (balloon) after a few years). When buying a house, or during the re-fi, or later, you can also get a home equity line of credit (HELOC) that has a variable rate, lower term, & possibly balloon payment. Use HELOC cautiously as it is secured by your house & is typically a recourse loan (i.e. you are on the hook for the collateral plus any amount due beyond that).

Real estate stocks & funds were discussed in the 11/15/24 issue.

For more information, see https://ybbpersonalfinance.proboards.com/