Mortgage rates recovered even more of their recent losses today, following reports that lawmakers were considering "phasing in" a 20% corporate tax rate by 2022 as a part of the current tax reform efforts.  The President's previously announced tax reform principles call for 20% out of the gate.

When those principles were initially released, stock prices and interest rates rose in unison.  On one hand, lower taxes are seen stimulating the economy, which traditionally puts upward pressure on stocks and rates.  On another note, some analysts think the tax plan would result in more government borrowing--something that hurts interest rates specifically because it creates more supply of the bonds that drive interest rate movement (higher supply = lower prices, and lower bond prices = higher rates).

With all of the above in mind, any news that detracts from the original tax principles should help rates recover and should also put some pressure on stocks to move lower.  That's exactly what happened today.  It's the 2nd straight day of solid gains for rates, bringing most lenders to their best levels in at least a week.

Whether this proves to be a turning point in the bigger picture remains to be seen.  Rates are in a well-established uptrend.  While that won't last forever, we'd like to see a bit more of a recovery before ruling out the continuation of the broader uptrend.  Ultimately, bond traders will want to see Trump nominated Jerome Powell to Chair the Federal Reserve in order for rate stability to materialize.