Bond yields soared this week.  They have been steadily rising actually for 6-8 weeks, but this week saw the biggest two-day rise in eight months.

The spread the banks enjoyed last month at 2.00% (difference between five year advertised rate, and the five year bond) is now at 1.39%.  This is starting to get very close to what normal spreads were during the good old days (1.10% to 1.20%).  Many lenders are nervous to jump rates at the risk of losing market share, but soon they will have no choice as it appears the bond yields are continuing to move higher.