assume that the GSE (the agencies that are either the US or have full backing of the US ) MBS - mortgage backed securities - are risk free. (convexity properties involve pricing but not impacting that quality) then should find a tightening or ease effect in mortgage rates that

...end up in the GSE pipeline which is about 90% of those mortgages. but one cannot find in last 40 years any relationship between such 30 year mortgages and home sales, prices, new home industry. none. doesnt that mean that risk free rates are always neutral from 2 years out?

doesn that mean that the US Treasury 10 year rate up or down is always neutral to the economy - one more step. the US Treasury 10 year is the pricing of the expectations for NGDP over the next 10 years.

or let me correct myself, it would be and was before 2015 if the Fed Reserve was thought to be following a "rule" reaction function that Fed Funds would change immediately (or as soon as change was assured) in basis points given an algo of inflation and capacity utlilzation.

now US Treasury 10 years is about 3/4 % rich (lower) than the risk free rate but the richness has been consistent for years now so the change in US Treasury 10 years over time is the change in the expectations for NGDP

what this means is that about 80% of those offering macro economic opinions or analysis based upon a demand supply schedule of US Treasurys - tightening easing, size of issuance - are wrong.

however if the market place sentiment finds that view useful then that approach is deemed right but still results in blindness and leads to surprises and bad risk management. @fejau_inc