Posted To: MBS Commentary

Coronavirus obviously ushered in an era of record low rates. The ongoing challenges and uncertainties are fairly well understood. They have a wide spectrum of possible outcomes. As far as we can see at the moment, the baseline outcome involves permanent job losses on a large enough scale to imply a broad shift in economic output. In turn, that shift implies that rates could remain low for a long time or even move lower. That's one of the possibilities, at least. It's the basic bullish case for rates going forward and it's easy to defend–perhaps too easy. In these situations where broad themes seem relatively logical and probable, financial markets have a knack for moving in a counterintuitive way. It might sound like I'm warning you about a counterintuitive move toward higher…(read more)

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Source: Mortgage News Daily