Please note that this newsletter is fiercely apolitical. There is no judgment on whether any given political development is good or bad. We are only interested in how financial and housing markets are reacting.  Significant market volatility has been all over the news since the April 2nd tariff announcement, but this week went a long…

Last week, there was a curious, but not uncommon juxtaposition of widespread headlines claiming “lower mortgage rates” and our own headlines suggesting one of the biggest weekly jumps in years.  Neither were incorrect, but only one was timely. Survey-based, weekly data served as fuel for the “lower rate” headlines because it failed to capture most…

Whether we’re talking about mortgage rates or a quintessential yard stick of the rate world like the 10yr Treasury yield, it was the roughest week in quite a while.  Nearly every corner of the market continues reacting in volatile fashion to last week’s tariff announcement and the subsequent updates. Momentum toward higher rates took on…

It was a great week for fans of chaos, volatility, and low interest rates as all 3 were delivered in spades. Despite the presence of several big ticket economic reports, the catalyst was Wednesday afternoon’s tariff announcement followed by the international response on Thursday night. For the most part, the market has been responding to…

Heading into the week, market watchers knew (or thought they knew) that Friday’s PCE inflation data had a chance to help or hurt interest rates more than any other economic report.  When PCE came out higher than expected on Friday morning, market watchers knew (or thought they knew) what would happen next.  But instead, the opposite…

Interest rates improved fairly steadily throughout the week with the biggest drop seen after Wednesday’s Fed announcement. The Fed didn’t cut rates, nor was any rational person expecting them to at this meeting.  So why did rates move lower? First off, we have to specify the rates in question. The Fed only sets the Fed…

Rates rocketed lower with stunning consistency starting in late February. They finally bounced last week, but rather than move back up to previous levels, they held in a relatively narrow, sideways range. That set the stage for a showdown this week. OK, a “showdown” may be a bit dramatic, but it’s not an overstatement to…

There’s a lot for financial markets to digest at the moment. Over the past few weeks, the net effect of that digestion has been good for bonds/rates and bad for stocks. But the prevailing correlation broke down this week and few people in the U.S. truly understand why. That’s forgivable, considering there has been a…

Rates have been almost perfectly consistent in moving lower since February 13th and broadly consistent since January 15th. There’s one big reason for that and it’s simpler than you might think. We’ll set the stage with a quick look at Treasuries, which serve as a benchmark for other interest rates like mortgages. The chart uses “candlesticks”…

It ended up being another good week for rates with another Friday drop to the lowest levels in 2 months. Momentum shifted for the better after Wednesday’s Fed Minutes but accelerated quickly after Friday’s release of the S&P Services PMI–a broad index tracking business activity in the services sector. Weaker economic data tends to promote bond…