Two hundred and ninety two thousand jobs are added to the economy in December versus 200k
expected, I think the bond market should have moved at least one basis point. That is not the case.
Here we stand this morning with the entire Treasury stack unchanged for the
day. The 10yr is currently 2.14%, which is right in the middle of the range for
the last 12 months. In fact the average 10yr yield for the past year was
2.135%. Additionally the 10yr is actually down since the Fed meeting when they
raised interest rates and indicated they expect to raise rates around 4 times
in 2016! So why is the Ten Year Bond down 15bps since December 16th? In fact why are
both short term and long term rates down since the Fed announcement?
Falling oil prices and the glut of oil should be news to turn the Federal Reserve around, but they say that cheap prices at the pump are temporary
The Fed is monitoring INFLATION but in my eyes inflation has not jumped in the United States. Inflation has been below the Fed’s target of 2% for several years now.
And it’s not just oil. The Bloomberg Commodity Index, which includes gold,
natural gas, corn, copper, oil, soybeans, sugar, etc. is down 25% in the past
year.
Bad news normally makes mortgage rates drop. THE CHINESE market and North Korea are bad news.
I don't think the gurus can ignore real job growth. Not gig second part time jobs, but real jobs.
Watching the stock market take some hits -- its like watching the surf on a day the tsumani sirens are singing. The beach I walk my aged Golden Retriever is Salt Creek Beach in Dana Point California and there are tsunami signs posted on the hill. I think they went up about four years ago. Now that Honey, my Golden is 14 I don't take her down the steps as she will make me carry her home.
We have to watch the signs and listen. It used to be that the ten year bond was the tool to predict mortgage rates, today I'm not certain. Keep watching the surf, when the curve goes up... so will rates
Video of surf I took at my sister's home above in Moss Beach, California
