Over the last few months, the Federal Reserve has reduced its key interest rate, the overnight LIBOR, to as low as 1 percent.  However, mortgage rates have not declined as dramatically.  One of the most commonly-followed indicators to determine where mortgage rates are headed is the yield on the 10-year United States Treasury note.  During economic downturns, mortgage rates and yields on 10-year U.S. Treasury tend to decline.  In recent months, the difference between the 10-year U.S. Treasury note and the 30-year, fixed-rate mortgage has been as high as 2.75 percentage points, largely due to lenders’ attempts to recoup previous losses by incorporating a larger profit margin into the interest rate.