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11th April, 25
Rough Week For Bonds. No Help From Friendly Data
Rough Week For Bonds. No Help From Friendly Data Bonds managed to recover modestly after the initial yield spike in the morning hours, but nonetheless earned the honor of seeing the biggest week over week jump in 10yr yields since 1981 (note: some outlets are saying 2001 or 1987, but we're not seeing that, and it doesn't really matter. It was a rough week, is the point). Looked at as a 2 week time frame, and it was on par with many other recent examples of moderately brisk selling. That leaves the upcoming week and a half in a great position to let us know how freaked out we should
Rough Week For Bonds. No Help From Friendly Data
Rough Week For Bonds. No Help From Friendly Data Bonds managed to recover modestly after the initial yield spike in the morning hours, but nonetheless earned the honor of seeing the biggest week over week jump in 10yr yields since 1981 (note: some outlets are saying 2001 or 1987, but we're not seeing that, and it doesn't really matter. It was a rough week, is the point). Looked at as a 2 week time frame, and it was on par with many other recent examples of moderately brisk selling. That leaves the upcoming week and a half in a great position to let us know how freaked out we should
11th April, 25
Mortgage Rates Jump Back Above 7%
It has undoubtedly been an extremely volatile week for financial markets and that includes the U.S. bond market to be sure. As an example, the poster child for the U.S. bond market, the 10yr Treasury, saw its biggest week-over-week increase since 1981. As we often discuss, mortgage rates are based on bonds that share many similarities with U.S. Treasuries, so it's no surprise to see chaos in that market and a concomitant jump in mortgage rates. In general, mortgage rates and bond yields are exceptionally well correlated (after all, a "yield" is the rate paid by a bond). As
Mortgage Rates Jump Back Above 7%
It has undoubtedly been an extremely volatile week for financial markets and that includes the U.S. bond market to be sure. As an example, the poster child for the U.S. bond market, the 10yr Treasury, saw its biggest week-over-week increase since 1981. As we often discuss, mortgage rates are based on bonds that share many similarities with U.S. Treasuries, so it's no surprise to see chaos in that market and a concomitant jump in mortgage rates. In general, mortgage rates and bond yields are exceptionally well correlated (after all, a "yield" is the rate paid by a bond). As
11th April, 25
Big (Bad) Things Are Happening in Bonds
There have been some bad weeks for bonds here and there over the careers of most anyone who's alive to read these words, but unless your career began before 1981 (and unless something changes drastically in the next 3 hours), you just lived through the worst week you've ever seen in terms of the jump in 10yr yields. Such things don't happen without reasons. Econ data is obviously out the window as this morning's sharply lower producer inflation did nothing to help. The laundry list of other reasons is largely unchanged as this move is a glacial sort of thing that is simply in
Big (Bad) Things Are Happening in Bonds
There have been some bad weeks for bonds here and there over the careers of most anyone who's alive to read these words, but unless your career began before 1981 (and unless something changes drastically in the next 3 hours), you just lived through the worst week you've ever seen in terms of the jump in 10yr yields. Such things don't happen without reasons. Econ data is obviously out the window as this morning's sharply lower producer inflation did nothing to help. The laundry list of other reasons is largely unchanged as this move is a glacial sort of thing that is simply in
11th April, 25
Warehouse Product, Innovator Conference; Zillow and MLS; The Story Behind Fannie's Firings
I don’t know if the rumor is true that Webster’s is considering adding “Tariffied” to its dictionary, but the word certainly fits the climate. Capital markets staffs who have to set rates and prices have been wondering where President Trump’s tariff philosophy is coming from, given that the market volatility has increased hedge costs. The answer is Peter Navarro, and everyone hopes that his tariff strategy pays off for the United States in the long run and is better than his legal past. In the meantime, world financial markets are roiled impacting lenders and borrowers alike. You may
Warehouse Product, Innovator Conference; Zillow and MLS; The Story Behind Fannie's Firings
I don’t know if the rumor is true that Webster’s is considering adding “Tariffied” to its dictionary, but the word certainly fits the climate. Capital markets staffs who have to set rates and prices have been wondering where President Trump’s tariff philosophy is coming from, given that the market volatility has increased hedge costs. The answer is Peter Navarro, and everyone hopes that his tariff strategy pays off for the United States in the long run and is better than his legal past. In the meantime, world financial markets are roiled impacting lenders and borrowers alike. You may
10th April, 25
The Reasons May be Esoteric, But The Selling is Real
The Reasons May be Esoteric, But The Selling is Real Bonds sold off today, in spite of a very bond-friendly CPI. One reason for that is the market's assumption that it will need to wait and see what tariffs do to inflation in the coming months. Another reason is the laundry list of reasons discussed in yesterday's recap. A new reason added to today's mix in the form of the passage of the budget framework in the House. As passed, there is $1.5 trillion in spending cuts staked simply on reassurances from Johnson and Thune. Markets didn't love the implications for Treasury issuance.
The Reasons May be Esoteric, But The Selling is Real
The Reasons May be Esoteric, But The Selling is Real Bonds sold off today, in spite of a very bond-friendly CPI. One reason for that is the market's assumption that it will need to wait and see what tariffs do to inflation in the coming months. Another reason is the laundry list of reasons discussed in yesterday's recap. A new reason added to today's mix in the form of the passage of the budget framework in the House. As passed, there is $1.5 trillion in spending cuts staked simply on reassurances from Johnson and Thune. Markets didn't love the implications for Treasury issuance.
10th April, 25
Mortgage Rates Are Actually MUCH Higher This Week
This article is not intended to report on the weekly Freddie Mac rate survey, but we'll have to reference it in order to participate in reality. To be fair, Freddie's survey is perfectly real, but it's unfortunately quite stale. That isn't always a problem, but it is today. Freddie reports that this week's mortgage rates fell to 6.62 from 6.64. Per survey methodology, that's the average rate between last Thursday and yesterday. The issue is that there's been a lot of upward rate movement during the past few days--more than enough to see that today's rates are significantly higher than anything
Mortgage Rates Are Actually MUCH Higher This Week
This article is not intended to report on the weekly Freddie Mac rate survey, but we'll have to reference it in order to participate in reality. To be fair, Freddie's survey is perfectly real, but it's unfortunately quite stale. That isn't always a problem, but it is today. Freddie reports that this week's mortgage rates fell to 6.62 from 6.64. Per survey methodology, that's the average rate between last Thursday and yesterday. The issue is that there's been a lot of upward rate movement during the past few days--more than enough to see that today's rates are significantly higher than anything
10th April, 25
CPI Finally Drops Big, Just in Time to be Irrelevant
It feels very odd to label a report like CPI as "irrelevant," and to be fair, traders were still paying some attention, but the trading response, in general, makes it clear that the current focus is elsewhere. In fact, the absence of any lasting response to this morning's data is nothing less than surprising considering just how low the CPI numbers were. The only way to reconcile the paradoxical reaction is with the knowledge that this CPI report is a look back to a simpler time when prices had yet to be impacted by tariffs. It's not that traders are 100% sure that tariffs will cause
CPI Finally Drops Big, Just in Time to be Irrelevant
It feels very odd to label a report like CPI as "irrelevant," and to be fair, traders were still paying some attention, but the trading response, in general, makes it clear that the current focus is elsewhere. In fact, the absence of any lasting response to this morning's data is nothing less than surprising considering just how low the CPI numbers were. The only way to reconcile the paradoxical reaction is with the knowledge that this CPI report is a look back to a simpler time when prices had yet to be impacted by tariffs. It's not that traders are 100% sure that tariffs will cause
10th April, 25
Non-QM, DSCR, Automatic QC Tools; Hedging a Pipeline is Difficult at Best With Tariff Changes; DC Report
“Over the course of 18 years, it costs over $235,000 for parents to raise a child... and that's just for the alcohol.” Here in Dallas, plenty of people aren’t drinking, and instead they are wondering what isn’t being discussed in the capital markets. Well, here’s something to ruminate on: “How China Can Crush the U.S. Housing Market.” The article describes how China (and other countries) could unload over $1 trillion of Agency MBS. Supply and demand would suggest prices would drop and rates would go up. Let’s hope that the odds are slim. The odds are better that originators
Non-QM, DSCR, Automatic QC Tools; Hedging a Pipeline is Difficult at Best With Tariff Changes; DC Report
“Over the course of 18 years, it costs over $235,000 for parents to raise a child... and that's just for the alcohol.” Here in Dallas, plenty of people aren’t drinking, and instead they are wondering what isn’t being discussed in the capital markets. Well, here’s something to ruminate on: “How China Can Crush the U.S. Housing Market.” The article describes how China (and other countries) could unload over $1 trillion of Agency MBS. Supply and demand would suggest prices would drop and rates would go up. Let’s hope that the odds are slim. The odds are better that originators
9th April, 25
Bonds Have a Lot On Their Minds (And The Mega Reversal After The Tariff Pause)
Bonds Have a Lot On Their Minds (And The Mega Reversal After The Tariff Pause) There are actually too many relevant considerations for bond market movement to attempt to put them all in one headline. Everyone can agree that today's main event was the announcement of a 90 day pause on tariffs and the ensuing mega reversal across multiple corners of the financial market. The stock reversal was the most insane, but MBS put up some numbers as well, with nearly a 1 point round trip from weaker to back to unchanged. Much like yesterday, the best way to bring yourself up to speed on the current
Bonds Have a Lot On Their Minds (And The Mega Reversal After The Tariff Pause)
Bonds Have a Lot On Their Minds (And The Mega Reversal After The Tariff Pause) There are actually too many relevant considerations for bond market movement to attempt to put them all in one headline. Everyone can agree that today's main event was the announcement of a 90 day pause on tariffs and the ensuing mega reversal across multiple corners of the financial market. The stock reversal was the most insane, but MBS put up some numbers as well, with nearly a 1 point round trip from weaker to back to unchanged. Much like yesterday, the best way to bring yourself up to speed on the current
9th April, 25
Wild Ride For Mortgage Rates, Should Spill Into Tomorrow Too
For anyone remotely tuned into financial news, it will come as no surprise that this has been a crazy week and today has been a crazy day. This is just as true for stocks as it is for the bond market that dictates interest rate movement. Overnight, stocks and bonds both deteriorated substantially. When it comes to bonds, that means prices moved lower and yields (another word for "rates") move higher. In other words, bond yields tend to move in the same direction as mortgage rates, and both were up BIG this morning. In fact, the average top tier 30yr fixed rate was all the way
Wild Ride For Mortgage Rates, Should Spill Into Tomorrow Too
For anyone remotely tuned into financial news, it will come as no surprise that this has been a crazy week and today has been a crazy day. This is just as true for stocks as it is for the bond market that dictates interest rate movement. Overnight, stocks and bonds both deteriorated substantially. When it comes to bonds, that means prices moved lower and yields (another word for "rates") move higher. In other words, bond yields tend to move in the same direction as mortgage rates, and both were up BIG this morning. In fact, the average top tier 30yr fixed rate was all the way
