21 Jun Rates are on the rise
After having their worst day of the year yesterday, the stock market is trying to put the brakes on and find a resting spot. This morning, both stocks and bonds are down. Volatility will remain high as today is a “quadruple witching” day as well. This occurs on certain 3rd Fridays of the month when multiple options and futures contracts expire, forcing traders to close out positions. St. Louis Fed president, and FOMC voting member James Bullard, gave their opinions on the tapering discussion, and felt it was too soon to discuss any type of exit. Bullard is normally considered hawkish, so his comments are not only out of character, but indicate that he feels the economy and markets are simply not ready to stand on their own any time in the foreseeable future. Mortgage bonds tried to find the bottom yesterday as well, but this morning have again taken a deep dive lower, pushing interest rates even higher. As the seemingly unstoppable bond market continues its free-fall, we will continue to suggest locking. With a 1%+ increase since early May, it is hard to imagine things getting much worse. However, these are unprecedented times. At this point, we need to brace for a continued climb in interest rate.