News You'll Use

Mortgage rates rose this week, as rates continued to move higher due to a higher-than-expected amount of corporate bond supply. The bond market is listening to Fed Chair Powell to expect rates to stay higher for longer. This week has been a light week of economic data, with a few pieces of stronger data, but nothing that should have shifted bond yields as high as we saw. A few weeks ago, we saw a sell-off due to a higher amount of U.S. Treasury bond issuance. This week, we saw the same thing with corporate bond supply. This is basic economics; higher supply of bonds means that investors will require a higher yield to take the additional bonds. We are seeing more instances where bond yields are rising due to factors outside of economic data. Bond supply has played a role, along with geopolitics as we are seeing foreign yields increase, which, reduces the demand that foreign investors have for U.S. Treasuries. All these factors have helped to put pressure on bond yields to move higher. It is tough to know whether supply and geopolitics will continue to put pressure on bond yields to move higher. Next week, we have September's CPI data being released, and if that number continues to show that inflation is slowing down, that should put pressure on mortgage rates to move lower.

• U.S. 10-year Treasury closed at 4.26% on Thursday afternoon

• ISM Services Index came in higher than analyst's expectations (54.5 vs expectations of 52.5)

• Factory Orders came in higher than analyst's expectations (-2.1% m/m vs expectations of -2.5% m/m

• Initial Jobless Claims came in lower than analyst's expectations (216k claims vs expectations of 233k claims)

• Mortgage Applications fell 2.9% this week