Geopolitical/Financial Issues
Unfortunately, President Trump’s tweet made the data insignificant this morning. With the additional trade tariffs on Chinese goods set to go into effect this weekend, news of a deal nearly being completed is heavily influencing the financial and mortgage markets. A trade deal is believed to be good for economic growth that, by default, makes it bad news for bonds and mortgage rates. It is worth noting that we have seen plenty of tweets, comments and other messages on this topic that indicated a deal was close and also far away. The expected knee-jerk reaction this morning is taking place, but if a deal does not transpire and the additional tariffs go into place, we will likely see the markets move in a way that quickly reverses this morning’s losses.