Mortgage bonds are taking another beating today as the downward pressure on bond prices continues to press rates higher. Today’s anticipated move was also influenced by a much stronger than expected Retail Sales report. As consumers continue to spend on high dollar priced items, this will add upward pressure to both inflation as well as interest rates. Generally, positive economic data is bad for mortgage rates and weak economic reports help support lower rates.
Bitcoin seems to be the investment to watch at the moment, as the cryptocurrency has increased 50% in value in the past month. Now trading just above $4,100 per coin, many swear this will hit $50,000 in the years to come. In fact, John McAfee has committed to eating his own “penis” on live tv if the price doesn’t rise 22,636% to $500,000 within just three short years. This outrageous comment has likely contributed to the tremendous increase this investment has experienced since his statement. Given the risks associated with bitcoin, it seems it could in fact reach this target, or it could be worth $0 at the three- year point. We will have to see what happens.
Given the continued downward pressure on bonds, we will maintain our locking bias.