Good Tuesday afternoon,

My apology for the tardiness. I am going to rely on Dan Rawitch’s commentary for the most part. The point here is that we are playing defense here. No reason to float.

The selloff in bonds continue and now the ten-year is dragging down the Mortgage bonds along with it. I am not sure we have found bottom, but hopeful we will find some support at the within the next 30bps. Rates are up a solid .25% since last Friday level. The 10-yr at .96 could break 1% and if it does, it could move to 1.30 under really stressed circumstances. At this point the pressure is coming from economic growth concerns, which stem from the belief we have a virus vaccine and that the economy will surge to the point of pulling the FED out of the picture. I don’t see that as a possible outcome. The economy is rebounding but we are nowhere close to not needing Fed support.  The stock market is selling off which tells you that equity investors do not buy this AND as rates rise, stocks will dive. Hear this… The FED will step in and I will be surprised if we do not see something soon. I just finished my 2021 forecast and it is clear to me that we cannot afford the ten-year or Fed funds to rise. I cannot tell you when we see relief but I do know that it is coming and should be soon. Hang in there.

Please remain safe and healthy, make today great!