20 Oct Potential Stimulus Pushed Rates Higher
Stocks are up this morning in response to advancements made by Nancy Pelosi and Treasury Secretary Steven Mnuchin as they “continued to narrow their differences,” regarding the next stimulus bill. The two are set to speak again today, which will likely have a similar response from the market. Advancements on this stimulus bill are one of the big short term threats to mortgage rates that we talked about yesterday. As this bill advances, the stock market will likely rise and mortgage rates will likely follow.
Mortgage backed securities are slightly down this morning. After making a couple runs at the double ceiling of resistance over the past few days, they continue to fall further below the ceiling this morning. We hold a strong locking bias in anticipation of new stimulus bill information.