Posted To: Mortgage Rate Watch
After a calm summer at historic lows, interest rate volatility has ramped up heading into the fall. What are rates worried about, and is this just the beginning of more drama? In a word: maybe! Because they’re based on bonds, rates are always worried about anything that can have a big impact on the supply/demand equation in the bond market. Since March 2020, virtually any major supply/demand consideration can be traced back to the pandemic in some way. In general, the worse the outlook is for covid, the higher the outlook is for rates. Rates have other concerns too. Inflation is a constant consideration for bonds/rates because bonds are repaid on a fixed schedule that cannot adjust for inflation over time. If investors think inflation will move higher, they would demand higher and higher rates…(read more)
