Rates Jump to 4-Month Highs; Cheaper Homes Driving Sales; Florence to Cost $3-5 bln
Mortgage rates had a bad day. Even after a weaker reading on Retail Sales (something that normally helps), the bond market lost ground. Unfortunately, that's consistent with the rest of the week as investors have largely shunned bonds. Lower demand for bonds = higher rates. Perhaps "shunned" isn't the perfect word. Investors are indeed buying bonds, but there have been so many to buy this week that sellers have had to lower prices to get them out the door. That's a bit of an oversimplification of the how things actually work, but the dynamic of higher supply driving higher rates is at the heart of the issue. Beyond that, investors are nervous about buying bonds too aggressively in an environment where wages are rising, retail sales are holding steady at long-term highs, consumer sentiment is
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