Weekly Report – November 16, 2022

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Highlight of the Week

Mortgage Rates Are High Because Nobody Is Buying Mortgages

  • 2020 saw a rise in deposits which led to many banks investing in MBS
  • The Fed, Banks, and others have ceased buying mortgage bonds since rates have risen. With lower demand, the small pool of investors is demanding higher rates.
  • The gap between a 10-yr Treasury yield and a 30-yr fixed mortgage rate is the largest since the 1980s and mortgage rates are the highest in 20 years.

Rate Curves

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Rapid Report:

Abelian Brand Mark

Reducing Inflation Without a Recession Might Not Be Feasible, Fed Official Says

  • Kansas City Fed President Esther George stated, “I have not in my 40 years with the Fed seen a time of this kind of tightening that you didn’t get some painful outcomes.”
  • The tight labor market was pointed to as the biggest driver of inflation as of right now saying, “I’m looking at a labor market that is so tight, I don’t know how you continue to bring this level of inflation down without having some real slowing, and maybe we even have contraction in the economy to get there.”

Missile Hits Polish Territory Near Ukrainian Border

  • A missile hit a Polish village three miles from the Ukrainian border. Two farmworkers were killed in the explosion
  • While the missile was Russian-made, the Russian government denies any involvement.
  • Initial comments from President Biden indicated that the missile is unlikely to have come from Russia due to the trajectory
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Weekly Report – November 9, 2022

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