Straightforward Gains After PMI Data Tuesday's session was infinitely more interesting than Monday's with the caveat being Monday was a total snooze-fest.  Bond market volumes were much closer to recent averages and there was even some logical, data-driven volatility.  As always, volatility can go both ways and today's went the right… Read more

Mortgage rates are driven by day to day changes in the bond market.  Bonds are focused on the Fed and the economic data that shapes Fed decisions.  Today's data isn't necessarily big on the Fed's radar, but the market reacted due to its implications on other data. Specifically, the S&P… Read more

Existing home sales posted strong gains in February while sales of new homes slipped slightly. In March each category switched directions. The U.S. Census Bureau and the Department of Housing and Urban Development said newly constructed homes sold at a seasonally adjusted annual rate of 693,000 compared to 668,000 in… Read more

Is it any surprise to see a strong reaction to economic data when the phrase "data dependent" has come to unequivocally rule all other approaches to understanding the interest rate outlook?  Yes, actually, it can sometimes still be a surprise because data dependency depends on the data being depended upon…. Read more

“The next time you dislike your life, remember it’s all about perspective. I know someone who reads 2-3 books a week, works out twice a day, has no financial worries, and has people who want to have sex with him all the time. Yet he constantly complains how much he… Read more

Boring Monday Keeps The Focus on Next Week Monday may as well have been a 3rd weekend day as far as the bond market is concerned.  While equities are preoccupied with earnings, bonds were trading at about HALF their normal clip based on the past 2 weeks of average volume. … Read more

Mortgage rates began the new week at almost exactly the same levels seen at the end of last week.  There were no major events or economic reports to cause volatility in the underlying bond market, but bonds were able to improve modestly by the end of the day. In general,… Read more

When I was a kid, whenever I would walk by a pay phone or newspaper vending machine, I’d check the coin change slot. Or periodically check under my Dad’s La-Z-Boy… every penny or dollar counted! (Nowadays, I still get excited when I find a forgotten quarter in my own pants… Read more

It's no secret that a vast majority of bond market movement these days occurs in response to a small handful of economic reports and the Fed's quarterly updates on the rate hike outlook (via the dot plot).  That means we see several weeks each month without any big ticket market… Read more

Sometimes Sideways is The Best Case Scenario Granted, there was a possibility that today could have been a rally day for the bond market, but as seen in the overnight trading session, that possibility depended on the escalation of war in the Middle East.  There aren't many other reasons for… Read more

The Fed expected to be able to cut rates 3 times in 2024 as recently as March. Financial markets agreed. But the data that's come out since then has everyone singing a different tune.  This week's data was more of an afterthought compared to last week's. The chart above pertains… Read more

It is “Take Your Child to Work Day” next Thursday which, if you work from home, is probably like a day off from school for the tyke. (I won’t be bringing my son Robbie to work, who, as I write this, is pedaling from Chicago to New York and bunked… Read more

The overnight session began with a very clear flight to safety in stocks (sell) and bonds (buy) on headlines regarding increased hostilities between Iran and Israel.  There have been plenty of "increased hostility" headlines this week that have not had much impact.  These were different because the initial newswires played… Read more

Good News and Bad News About Today's Selling The bad news is that bonds resumed their weaker tendencies today with 10yr yields moving back up into the 4.6's.  Culprits included stronger economic data, hawkish Fed comments, and possibly the fact that the previous day's gains were driven by corrective short-covering. … Read more

Tuesday marked the highest mortgage rates since November, capping a mini surge that began after last week's inflation data. After a moderate improvement yesterday, rates moved back up toward (but thankfully not above) the recent highs today.  Financial markets reacted to stronger economic data and comments from Federal Reserve officials… Read more