In last week’s newsletter, we discussed a series of wild cards hitting the table and the resulting impact on financial markets. Specifically, the potential reversal of post-election optimism helped interest rates break below 2017’s narrow range. But that was just one small example of much bigger uncertainty. Sooner or later, markets will have to decide what’s most important and trade accordingly.
Source: Kevin Litwicki Universal Lending
For Markets, Political Spotlight Shifts From US to Europe

After spending nearly 6 months in the same narrow range, interest rates finally made a move LOWER this week, much to the chagrin of the prevailing narrative calling for “higher rates in 2017.” At the same time, stock prices have been in their most persistent downtrend since the election. All this has investors wondering if the “Trump trade” is beginning to unravel.
Source: Kevin Litwicki Universal Lending
Rates Hit 2017 Lows as Wild Cards Hit The Table

Even before it began, this week was destined to be interesting, if not downright important, due to the data and events on the calendar. The scheduled events were joined by unexpected headlines, making for even more market volatility. By Friday, just when the stars seemed to align for rates to break below 2017’s constrictive range, they shot paradoxically higher! Why would they do such a thing?
Source: Kevin Litwicki Universal Lending
Making Sense of This Week's Crazy Market Movement

Over the past few weeks, downbeat, cautionary housing market data has been increasingly prevalent. During that time, rates and stock prices had generally moved lower. But those trends shifted this week–in some cases, abruptly.
Source: Kevin Litwicki Universal Lending
Opposing Arguments in Housing Data and Markets

Seemingly overnight, the bill to replace the Affordable Care Act is all anyone can talk about in financial markets. How did we get here and what does it mean for rates going forward?
Source: Kevin Litwicki Universal Lending
How The Healthcare Bill Affects Rates and Markets

Last week’s newsletter made the case that this week’s Fed rate hike was “pointless” because bond markets (and mortgage rates) had already fully adjusted for it. Instead, it would be the Fed’s economic projections (their forecasts for future rate hikes) that would make or break this week’s rate movement. That’s exactly what happened.
Source: Kevin Litwicki Universal Lending
Fed Hikes, But Mortgage Rates Fall. Here's Why

Next week’s Fed announcement is a hot topic. Market metrics and surveys of economists suggest ever-increasing odds of a rate hike. As such, it may come as a surprise to learn that a rate hike is pointless in terms of its impact on financial markets, but there’s a catch.
Source: Kevin Litwicki Universal Lending
Fed Rate Hike Next Week is Pointless!

Both for the housing market and interest rates, this week stood in stark contrast to the previous week. Whereas rates had been at the lower edge of their recent range, they’re now near the top. Whereas last week’s housing reports showed great promise, this week’s may raise serious doubts.
Source: Kevin Litwicki Universal Lending
Housing Implications of Fed's March Rate Hike

Given an ongoing plateau in home sales figures in 2015-2016, many housing economists thought the late 2016 rate spike would cement a slow-down for the housing market. Although purchase apps definitely took a hit at first, sales metrics have come roaring back.
Source: Kevin Litwicki Universal Lending
Housing Market Resilience Defying The Odds

It used to be that higher inflation meant higher rates, period. That changed abruptly beginning in 2011. The combination of global financial panic and unconventional monetary policy helped rates plummet even as inflation recovered from its post-meltdown lows. The longstanding correlation seemed to have broken, but it’s beginning to look like it has merely been dormant.
Source: Kevin Litwicki Universal Lending
Inflation is Just One of Rates' Multiple Personalities