May 2019 Monthly Market Update
Weekly Rate Update
Wednesday, May 8, 2019
Mortgage interest rates are based on the supply and demand of mortgage bonds. Bonds depict interest rate movement and they move in opposite directions. When bond prices decrease, interest rates increase. When bond prices increase, interest rates decrease.
What’s going on and why does it matter?
Mortgage bonds are continuing to drift sideways as financial markets remain worried about US-China trade uncertainty and the potential impact on the global economy of an ongoing trade war. Reuters reported this morning that, last Friday, China apparently backtracked on nearly all aspects of the trade deal, which is why President Trump is formalizing the massive tariff increases scheduled for this Friday. Financial markets are waiting for the China trade delegation to arrive in Washington for the 11th round of talks starting tomorrow. Meanwhile, Brexit is back in the spotlight on reports that talks are on the verge of breaking down between Prime Minister May’s government and the opposition Labour Party, with talk also that May is close to setting a date for her departure from office.