Mortgage Rates Continue to Climb

Mortgage rates are continuing to move higher today as the trend is definitely not our friend at this time. WE are continuing to see high volatility in our markets. Currently at 11:00AM, we are seeing the 10yr at 2.32% and MBSs down 17BPS.

More Fed talk this morning as James Bullard (St. Louis Fed) and one of the doves on the FOMC is changing his mind and said he is "leaning towards" supporting a rate increase in December FOMC. He went on to comment that it is not the December increase he is concerned with but how rates will be through 2017. He does not see any bubbles in the economy now and commented that Trump has " an ambitious program", but immigration and trade are "slow moving issues" unlikely to impact near term monetary policy. Further, it is "too early to say" if inflation could come "roaring back". There are other Fed officials that will speak also today, and you know it will be the same old rhetoric about the rate increase.

Trump named Sen. Jeff Sessions the job of Atty. General. CIA to Rep. Mike Pompeo, and Michael Flynn National Security Adviser. All three tough on immigration and terrorism, media focusing on the reality all of them not conciliatory toward centrists’ views. Reports this morning that Trump is also talking to Mitt Romney about Sec of State; Giuliani also I the mix but lots of opposition to him and John Bolton, UN Ambassador, also being considered. Just reporting the latest from the Trump camp - none of those people or any of his appointments are likely to have much of a direct market influence now.

The better than expected reports on CPI (increased inflation), weekly claims (the lowest in many years, 1973), and housing starts (+25%) Janet Yellen essentially confirmed that the Fed will move the FF rate higher at the FOMC December meeting. Volatility is not showing any signs of abating.  I would lock now as this seems like it want to continue climbing with no determination on when or if it may slow down.