Mortgage Rates Moved Slightly Higher

Mortgage rates are moving at a snail’s pace upward, just enough to say that it is up after Friday’s dip last week.  At 10:10AM this morning, the DJIA hit 23K (23,003), it is the 4th time this year the index has climbed 1000 points. It was destined to hit it as it has been too close not to push through it. It didn’t push through however, the Index it 23K then fell back a little this afternoon.

The NAHB released its housing market index this morning at 68, the highest since last May. Optimism among home builders, which has been easing slightly from very strong levels, bounced back strongly which is 4 points above both August and September.

Trump met with economist John Taylor, who is considered to favor higher interest rates than current Federal Reserve Chair Janet Yellen. Taylor, a grad from Stanford and is a Mary and Robert Raymond Professor of Economics at Stanford University, and the George P. Shultz Senior Fellow in Economics at Stanford University's Hoover Institution. In 2012 he was included in the 50 Most Influential lists of Bloomberg Markets Magazine. Last week Trump people said Trump would announce his choice for the Fed chair after Yellen’s term expires in February. Yellen is still in the running. Now we hear trump will not announce it until November 3rd.  

Lamar Alexander and Democratic Senator Patty Murray announced a bipartisan breakthrough to shore up Obamacare, an agreement that would revive federal subsidies for health insurers, and President Donald Trump voiced support for the deal.  

The 10yr note remained unchanged from yesterday at 2.30%, while MBSs were a bit on the positive side.

In summary, bonds continued hanging within their narrow recent ranges today.  Not sure what it will take to jolt rates higher/lower from here, but it appears significant motivation will be required.  Floating could net small returns, the question is whether it's worth the risk, given likelihood of minimal gains.  If you do float, be prepared for pricing to get worse, it happens regularly!