As contentious as the US midterm elections were, there was never a scenario in which they mattered. Any possible configuration of Republicans and Democrats in the House and Senate would have yielded pretty much the same set of economic policies going forward: Ever-higher debt, upward trending interest rates and (through the combination of those two) rising volatility.

So with the sideshow now in the rear view mirror, we can get back to our new normal. From this morning’s media reports:

U.S. three-month LIBOR climbs to decade high

(Reuters) – A key gauge of what banks charge each other to borrow dollars for three months increased to its highest level in a decade on Wednesday ahead of the U.S. Federal Reserve’s two-day policy meeting that will begin later in the day.

The London interbank offered rate to borrow three-month dollars climbed nearly 1 basis point to 2.60113 percent following a 0.2 basis point gain on Tuesday.

Three-month LIBOR has risen in 15 of the last 16 sessions, prompted by the Fed’s rate hikes, rising U.S. government borrowing and a shrinking Federal Reserve balance sheet.

LIBOR is the benchmark rate for $200 trillion of dollar-denominated financial products, mainly interest rate swaps and floating-rate loans.

Mortgage applications drop to 4-year low as interest rates hit 8-year high

(CNBC) – Total mortgage application volume fell 4 percent last week from the previous week. Volume was 16 percent lower than a year ago.

Rising interest rates are now clearly taking their toll on potential homebuyers. Total mortgage application volume fell 4 percent last week from a week earlier and plunged 16 percent from a year ago, according to the Mortgage Bankers Association’s seasonally adjusted index.

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