Al Grant's Blog

Rates ended the week worse than they began.  With a light economic calendar this week, will rates rebound or go even higher? And why did they move higher to begin with? Read on and find out the answers for the questions every originator is asking.

So what happened to rates last week? To explain what happened to rates you just need to remember back to your Economics 101 class. Anyone with that has money invested in stocks can tell you that stocks have been hot lately, real hot. However, investors only have a finite amount of money to invest.  Therefore many have pulled money out of bonds to invest in stocks, which means according to the rules of supply and demand, bonds need to offer higher interest rates to attract investors so rates have been forced higher.

So when will it end? Probably not anytime soon.  It will take either a pull back in stocks or a very strong report indicating inflation almost non-existent for rates to begin to move lower.  And the probability that either of these events will occur this week is slim.

The bottom line: Lock'em if you got'em