Good Wednesday AM on this best day of the week,
Bond prices are up a bit this morning. This is particularly positive because oil has spiked again this morning. New Home Sales fell dramatically as higher prices combined with rising rates have taken a toll on housing affordability. As one might expect, mortgage apps are down over 8%. Once again I am unable to say whether or not bond prices have hit bottom yet. I would continue to play defense and keep your pipeline locked.
To put some numbers on how bad it has been for bonds, the losses have been unprecedented and have wiped about $2.6 trillion from a global benchmark since its peak last year. The Bloomberg Global Aggregate Index has fallen 11% from a high in January 2021. That’s the biggest decline from a peak in data stretching back to 1990, surpassing that of even the financial crisis. Ouch.
Please remain safe and healthy.