Wednesday, December 12, 2018
Mortgage interest rates are based on the supply and demand of mortgage bonds. Bonds depict interest rate movement and they move in opposite directions. When bond prices decrease, interest rates increase. When bond prices increase, interest rates decrease.
What’s going on and why does it matter?
The rally in mortgage bonds has lost momentum as global stock markets cheer yesterday’s reports that China would cut its import tariff on cars made in the US to 15% from 40% and on news that Canada had granted bail to Huawai CFO Wanzhou. Further supporting market sentiment were favorable comments from President Trump regarding the ongoing US-China trade talks. Even so, market sentiment may change as the Brexit drama continues to unfold in the UK with British Prime Minister May facing a no-confidence vote that is scheduled for later today. Meanwhile, on today’s economic calendar, the consumer inflation numbers came out in line with market expectations.