Another week, another vicious rise in mortgage rates. There just wasn’t enough “bad” news to reverse the market’s recent trend to the upside.
There were three notable pieces of news from last week:
- The Fed’s May meeting minutes revealed a genuine concern that inflation is not slowing as anticipated
- The employment report showed that employers are still hiring
- Even though incomes slowed dramatically, spending is on the rise
Making matters worse for mortgage bonds is that the stock market continues to flourish. In search of better return, many investors are taking their dollars out from the bond market and using them for stock purchases.
With the extra supply, mortgage bond prices are falling and that raises their respective yields/rates.
This week is devoid of data so mortgage markets will be looking for clues from outside influencers including global oil supply, hurricane weather patterns and geopolitics.
Unless mortgage bond traders engage in some profit-taking this week, the upward trend should continue.
