At the end of last week, the bond market was sending optimistic signs that the recent run-up in rates may be stabilizing. It had done the same the previous Friday to give way to the highest rates in 3 years as the week progressed. Unfortunately, the most recent Friday offered a similar situation. treason.
In other words, the bond market was just consolidating to another jump towards even lower levels (weak bond market = higher rates, all other things being equal). Today’s move was particularly pronounced as it combined general weakness in the morning hours with poor reaction to a specific event in the afternoon hours.
The event in question was a speech (and subsequent comments) by Fed Chairman Powell. Rather than do anything to stave off last week’s Fed-induced rate hike, Powell forcefully doubled down on the Fed’s urgent need to shift Fed policy toward an even less rate-friendly stance.
Mortgage lenders were already about an eighth of a point higher in terms of 30-year fixed rates this morning. After Powell, rates close double this move (i.e. some lenders are a quarter point higher from last Friday’s levels). That makes today one of 5 days with this peak in over a decade.
Lenders’ rate offers are widely stratified and many are still caught up in market volatility, but it’s safe to say that the average lender is now above 4.5%, and much closer to 4.625% for conventional 30-year upper-tier fixed scenarios.