Friday, July 15, 2016

Rates Steady Despite Market Weakness; Bonds Improve After Turkey Headlines; How The Fed Could Surprise You

Mortgage rates have been moving higher, in general, this week. That upward momentum tends to coincide with weakness in broader bond markets. For instance, when yields on US Treasuries are moving higher, mortgage rates usually are as well. That's no surprise considering the bonds that underlie mortgages (MBS) are well-correlated with Treasuries. But what IS a surprise is that rates held steady today even as bond markets suggested a move higher. Granted, we've seen more of this behavior lately where lenders won't adjust their rates right away to match the market, but today seemed to defy a bit more logic than other recent examples. While today's surprisingly steady rates are a welcome sight, that alone isn't enough to defeat the negative trends set in motion this week. The concern is that early

from
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