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Market Reaction Continues to be Unfavorable for Rates

All across the world the bond market is in the middle of the sharpest two week loss in the last 26 years. Many dynamics are at play and all of them are causing interest rates to increase at this time. Economists fear President Elect Donald Trump and his initiatives will trigger inflation concerns. In order to stay ahead of inflation risk the Federal Reserve made every significant statement this week leading us to believe a rate hike in December is highly likely. European investors made a dramatic move to sell bonds in their market ahead of the weekend, thus pushing global yields higher. All these events coming together at the same time has created quite a bit of volatility in the market. At the end of the day you still cannot argue with economic fundamentals, and right now they are telling us the economy is currently not is a position to absorb higher rates. Trusted analysts still believe the market will settle down once the headline news and overall shock wears off.

Rates are great! Have a great weekend!

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