Mortgage Rates Sideways to Slightly Higher Despite Stock Rout
The source of inspiration for last week’s bond market strength was a much bigger move in stocks. The latter are generally freaking out about potential trade wars stemming from recent tariff announcements. On many occasions, big drops in stock prices correspond with improvements in rates. Rates fall when investors buy more bonds, and investors often park some of their stock-selling proceeds in the safer haven of the bond market (because there's typically much less price volatility). Stock weakness isn't moving rates nearly as much as normal these days because rates continue to face big headwinds that won't quickly subside (Fed rate hike outlook, Treasury issuance outlook, and general risks of upside economic surprises).
Courtesy of Rick Lombardo 310.435.7439, Rick.Lombardo@grarate.com, VP of Mortgage Lending at Guaranteed Rate.
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