Good Friday AM,

Bonds are horrible this morning. The yield on the ten-year jumped to 2.50%. We feared when we could not hold 2.15 that there was little to no resistance to keep the yield below 2.5%. Mortgage Bonds had yet another gap down in price and slid through yet another support level. As I have repeatedly said, this is an environment unlike anything we have ever seen. We have a gas crisis like the 70s, inflation of the 80s, a stock market correction like the late 90s and housing affordability nose diving like we had in the early 2000s. All of these independent events up until now have been unprecedented. Now they are all occurring at the same time. Nobody can know for certain what the FED is going to have to do to rates to stop inflation. The bond market had been casual about all that is happening and now the market is not only reacting, but over reacting! These questions will not be answered for a while. Meanwhile, I suggest staying locked and remind borrowers that things could get much worse and waiting may be costly. I have not changed my midterm opinion about the economy and rates, but in the present, we should duck and cover.

Please remain safe and healthy, enjoy the weekend and first, make today great.