Mortgage Rate Watch
Mortgage Rates Back to 2017 Lows on Trump Tweet

Mortgage rates dropped today after news broke (first rumors, then confirmation via Twitter) that President Trump was disbanding his councils of CEOs.  The move apparently came in response to attrition among several CEOs following Trump's press conference on recent events in Charlottesville, VA.  In not so many words, Trump disbanded the councils before any more CEOs had a chance to quit.  

Political turmoil--especially that which appears "anti-business" in any way--always runs the risk of hurting stocks and helping bonds.  That's exactly what happened today.  "Helping bonds" in this context means higher demand for bonds among investors.  Excess demand for bonds pushes rates lower.  

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Rates Rising as North Korea Talks Baseball

Mortgage rates continued higher today as markets reacted to news that North Korea would tactically abstain from launching nuclear weapons at Guam because it was having such a good time watching the "foolish and stupid conduct of the Yankees."  Perhaps Kim Jong Un is a Sox fan?  Someone should tell him that series is over and that the Mets might not put up as much of a fight.  

Or perhaps "Yankees" referred to America in general.  Either way, markets took solace in the absence of global nuclear war by buying stocks and selling bonds.  Net selling pressure in bonds pushes rates higher.  Strong economic data in the morning only added to bond market weakness.

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Mortgage Rates Up Slightly From Long-Term Lows

Mortgage rates rose moderately today as weekend news headlines suggested some measure of de-escalation of nuclear tensions between the US and North Korea.  To be sure, the news wasn't resoundingly conciliatory, but investors took solace in it nonetheless.  

In general, when headlines suggest the world is less likely to end by Monday, investors will be slightly more risk tolerant.  One expression of risk tolerant trading in financial markets is to favor something like stocks as opposed to bonds.  If there is net selling pressure on bonds, it creates net upward pressure on interest rates.  This was the case this morning.

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Mortgage Rates Uninspired at 9-Month Lows

Mortgage rates held near the lowest levels since November 2016 today, after a key economic report showed subdued inflation.  The Consumer Price Index (CPI) is one of the most important metrics relied upon by the Fed when it comes to measuring the impact of its policies.  In general, if inflation is increasing or running higher than expected, the Fed will be more inclined to raise rates.  Although the Fed Funds Rate doesn't directly impact mortgage rates, anything that increases the likely pace of Fed rate hikes would also tend to push mortgage rates higher.

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Mortgage Rates Hold 2017 Lows Despite Market Volatility

Mortgage rates remained in line with 2017's lows today, despite noticeable improvement in underlying bond markets.  Under normal circumstances, bond market improvement equates fairly directly with mortgage rate improvement, but things aren't exactly normal lately.  

On the simplest level, the timing of market movements over the past 2 days tells the story.  The prices of mortgage-backed-securities (MBS) are right in line with those seen yesterday morning when most of yesterday's rate sheets came out.  Bonds and MBS weakened yesterday, but not enough for most lenders to change rate sheets before the end of the day.  In that sense, today's bond market strength allowed for lenders to keep rate sheets unchanged whereas rates would have been slightly higher had bonds been flat on the day.  

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