Mortgage Rates Moved Lower Today

Mortgage rates moved lower again.  Drama surrounding the Trump administration was also present.  A lot of volatility when I sent out my morning report when it was reported that Steve Bannon was out as the chief advisor to Trump. The interest rate markets were seeing lower rates and MBS prices were in positive territory.  The stock indexes were being pressured and it looked like another day of selling. One of the pressure points yesterday was concern and rumors that Gary Cohn may be ready to resign. Cohn a Wall Streeter and markets thought if he left any tax cuts, health care, and other political footballs would be in serious jeopardy.

On the news stocks stopped retreating and the bond market and MBS prices dropped. This afternoon markets settled down but the opinions were flying around like flies on a raw piece of meat. This weekend watch the Sunday morning news shows, there will be numerous officials and opinions about tax cuts and the entire Trump administration that appears in complete disarray.  Stock indexes found some near term support on the momentary relief that Bannon is out. Bannon wanted a trade war with China that had been a thorn in the market recently. Most economist still think a tax cut this year is a toss-up and do not believe now Congress can get together to pass any significant tax cuts, infrastructure spending or anything equity markets have been betting on. Republicans are divided and until the part can bury their differences not much can happen.

Next week brings the normally-hotly-anticipated Jackson Hole symposium, but with monetary policy for both the Fed and the European Central Bank essentially an open book of late, market participants are not expecting too much drama.

In summary, after starting the day positive, everything came back to where it opened. I keep saying when we are at the lows of the narrow range we have been in, it is time to lock and not look back.