Mortgage rates continued moving higher at a fairly quick pace today. Some borrowers may now start to see rate quotes moving up an eighth of a point. While we could see some sort of technical bounce or a data-driven consolidation of recent trading patterns, bond markets have generally been on a tear toward higher rates so far in September. Over the past few days, speculation has run rampant that the Fed is set to drop the considerable time verbiage from the official policy statement regarding how long after QE ends before rate hikes would begin. Last week we had a laundry list of negative September factors. They include things like the fallout from the last European Central Bank Announcement, corporate debt hedging, and other boring stuff. The important part is that the pervasively negative momentum existed independent of Fed expectations. That means 2 things. First, the trend could remain negative even if the Fed doesnt change verbiage. And second, bond markets could bounce back even before next Wednesday. That said, the collective belief in the Fed story is big enough as to prevent any major correction, so dont hold out hope for much more if we catch a break in the next few days.
Posted on: Wed, 10 Sep 2014 22:37:50 +0000
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