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MTA Could Break 0.3% Floor

Rates

The streak of record lows for the Monthly Treasury Average has been extended. The index is poised to fall below 0.30 percent.

An analysis of one-year Treasury data from the Federal Reserve indicates that the MTA was 0.31167 percent last month. It was the lowest level for the index based on Fed data reaching back to 1953.

The December index was 0.31833 percent.

In January 2010, the MTA was 0.46333 percent.

Each month, the Fed publishes a daily average for the one-year Treasury yield. An average of the most recent 12 months is what determines the current MTA.

A Mortgage Daily analysis of recent Treasury activity indicates that MTA could fall lower than 0.30 percent during the next few months before reaching a bottom.

The decline has been a bonanza for borrowers with adjustable-rate mortgages tied to the MTA.

A more widely used ARM index, the yield on the one-year Treasury, was 0.26 percent at the end of January, according to Treasury Department data, better than 0.29 percent on Dec. 31, 2010. The one-year yielded 0.31 percent on Monday.

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