2022-09-20

Bonds Away: 30-Year Mortgage Running to 7pc

The bounce in bonds may happen, but it'll be about 6 percent lower.
I don't know that it will get there, but the path to 7 percent on the 30-year mortgage is opening up. Going by the current ratio of mortgage rates to the 30-year treasury rate, if ZB hits the target it could push mortgage rates towards 8 percent. the X-factor here is the Federal Reserve's QT policy.
The S&P 500 Index bounced of resistance. There isn't much chance of a bounce with bonds sinking and there's not much risk except for the Federal Reserve tomorrow. Most likely the path forward is bearish immediately, but if the Fed front-loads hikes perhaps bad news is good news.

Microsoft and Google both traded at new 52-week lows the past couple of days. Didn't close at new lows.

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