Mortgage rates post a multi-day comeback despite higher oil prices 🏠📉🛢️
Flash Market Update
Bond markets have shown surprising resilience, despite oil prices surging 20% in the last 5 days.
Optimism that the war in Iran was potentially reaching a crescendo helped mortgage rates reclaim their footing at the start of the week.
However, Trump’s speech last night sent oil to within a few dollars of a decade high, suggesting the party would be coming to an end.
Despite the jump in oil prices, bonds held their ground again today notching the fourth straight day of gains.
Unlike the previous 4 weeks, mortgage-backed securities were the better performer, helping to tighten MBS-Treasury spreads each day.
Big rallies start with small victories, and the current winning streak has mortgage rates feeling like they’re back
Although the latest improvements only reclaimed 62 basis points of the 161 bps in PRICE lost the previous month, it is still worth celebrating.
Perhaps the March bond sell-off went too far and investors are simply rebalancing ... or they are preparing for a potential economic slowdown.
Price shocks, especially those driven by energy prices, can have a suffocating effect on the consumer.
Two-thirds of U.S. economy is driven by consumer spending, which puts the next two-quarters in the recession crosshairs.
Tomorrow’s NFP employment report will hopefully pour fuel on the fire by reinforcing the growing recession narrative.
Thanks for reading.
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