Rates are Rising…

And based on recent trends this upward progression may continue. Set all federal policy aside for the moment and accept the fact we’re in a good economic environment. For the first time in nearly a decade we’re about to see 30-year FRM’s approaching the 5%+ range. If you’re one of those optimists attempting to “hold out” for that day where it gets back under 4% again, you might be waiting a looooong time!

Attached is some MBS commentary:

MBS are down -47bp (FNMA 30-yr 3.5 at 100.53), around 34bp below morning levels, and near the low for the day. Unfavorable repricing took place. There was no major news today to justify a selloff of this magnitude. It appears that with yesterday’s Fed meeting out of the way without any surprises, investors were comfortable continuing the strong downward trend seen in recent weeks. It also did not help MBS that the Atlanta Fed’s GDP model raised its forecast for first quarter GDP to 5.4% from 4.2%. In the past, though, even large changes in the GDP model rarely caused much reaction. The Dow is up 40 points. Tomorrow, the important Employment report will come out at 8:30 et. The consensus is for an increase of 175K jobs in January.

Five-day movement with the 10 year Treasury:

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