Sometimes you wish you were wrong

Last week I had predicted we may see a spike in interest rates.  Unfortunately, this became more true than I expected.  We’ve lost over 200 basis points on the Fannie Mae 4% coupon since the opening day Thursday.  We’re past any major news affecting rates and we’re currently just riding the trend wave. 

The hard part to predict now is where the trend will end.  With such dramatic movements, we could see pricing worsen more and more or investors may decide to start buying MBS’s at a discount at any moment causing pricing to dramatically rebound. 

Either way, expect to see 30 year fixed rates at their worst levels of the year.

Related posts:

1. Short term rates improved, 30 year rates are pretty much the same
2. Could this be the end of low rates?