MBS Day Ahead: If Rates Keep Moving Higher, It Could Still Be a Head Fake

Posted To: MBS Commentary

Rates are in the midst of a serious, threatening move higher. Yesterday brought additional confirmation of the end of the friendly Springtime consolidation trend and it took us one step closer to the highest yields in more than 4 years. The specific reasons for yesterday's weakness were covered in the MBS Live Huddle , but even then, the bigger-picture justification for gradual weakness in 2018 is well-documented here and elsewhere (Treasury issuance, Fed policy outlook, upside growth/inflation risks). Rates could very well continue higher today--possibly even enough to break those pesky 4-year highs from back in late February. But even if they do, it might not be the end of the world. In fact, there are at least 2 recent examples of big scary rate spikes consolidating (like we did in March...(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

from Mortgage News Daily https://ift.tt/2vyenEO