Rally In The Bond Market…

  • January 13, 2014

partytoonFriday the Economic Situation Report was released and Non-Farm payrolls came in at about 1/3 of what economists had forecasted. Ouch. Well, there is only one thing to say about that; party in the bond market! That sounds harsh, but bad economic news can be a good thing for mortgage rates. When there is uncertainty, investors seek safety in the bond market. Rates decreased significantly last week and have continued to improve today.

  • Let’s keep the good times rollin’! Investors were expecting a strong employment report and had prepared for the bond market to take a hit. However, the number under-performed so significantly investors are still trying to adjust, causing bond prices to rise. Most lenders reduced mortgage rates shortly after the noon hour.
  • Does this low employment number mean the government will continue buy our bonds for a little longer? Maybe. This report has many people questioning the Fed’s decision to taper bond purchases. We won’t know until the minutes from their next meeting are released. However, many hope Yellen & Co will decide to keep interest rates extra low for the time being.
  • No major economic news was released today. So, let’s just enjoy the good times while they last. If you are in the market for a home; today is a good day to lock in a great rate.

Tomorrow Retail Sales and Business Inventories will be released. This will give us a good read on the health of the economy.

By Lindsey Fediuk, Quicken Loans Capital Markets Analyst

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