Mortgage bonds traded lower in the last two dates, putting upward pressure on home loan rates
Mortgage bonds traded lower today after the Producer Price Index came in more than double the market's expectations. That raises fear of inflation. The Consumer Price Index will be released tomorrow and will give us a better idea of reality on inflation.
The trend of home loan rates most closely matches the trend of U.S. Treasury 10-year notes, which rose two basis points today. The U.S. Treasury has been winning the competition for investment with European bonds, but the Eurpoeans may raise their rates later this year to draw money into their countries. If so, look for home loan rates to rise in December.
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