The devastating headlines coming from the news today could potentially cause volatility in all security markets. Two days ago, President Biden reiterated the US’ goal to have all US citizens removed from Afghanistan by Aug. 31. He has not given a statement since this mornings attacks in Kabul. If his position changes, we will see massive movement.
Although the Jackson Hole Fed meeting is tomorrow and will likely push 10 year treasuries higher with early easy money tapering news, technical signs hint at a decrease in 10 year yields. Remember that the 10 Year Treasury yield and mortgage rates move together. When the 10 Year drops, mortgage rates tend to follow. Mortgage Backed Securities broke below their floor of support this morning but have climbed back and are flat today. With the possibility of tomorrow’s Fed meeting pushing the 10 Year higher, we are holding a locking bias.