Rates Up on Earnings and Inflation

Well, the bad news is that interest rates have climbed by a 1/4 point this week. The good news is....hmmm...can't think of any at the moment. Rates went up for a couple reasons. One, the stock market went gangbusters today because of positive earnings from Intel, JP Morgan Chase, and Coca Cola. This caused money to flow out of bonds and into the stock market, raising the yield on treasuries. Secondly, the key inflation reports (PPI and CPI) were released this week for the month of March and showed a higher than anticipated inflationary number. Both reasons are bad for mortgage rates.

Maybe, just maybe, the good news is that Wall Street has stared at some bad numbers this week and sentiment appears positive. Let's see... bad PPI and CPI numbers, record oil prices, more bank writedowns, and dismal housing numbers. The equites markets would have tanked on these numbers just a couple weeks ago, so maybe we are seeing a bottom.

Hey, I'm working here to see the glass half-full. On that note, I'm off to a full glass of vino...Cheers!

Refinance Tool Box.