What does Taiwan have to do with US mortgage rates?

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Financial Times 11h ago

What does Taiwan have to do with US mortgage rates? - Financial Times

Quick Summary:

As the last post pointed out, two-thirds of Taiwan’s insurance industry assets are overseas, and predominantly denominated in dollars, while the opposite is true for their liabilities, roughly 80 per cent of which are denominated in local currency.

In other words, Taiwanese insurers invest the proceeds of their premium income predominantly in foreign currency assets while making promises to redeem those policies predominantly in local currency.

That led prices on long-dated interest rate options to rise steadily, essentially reversing the impact on mortgage rates of artificially low prices.