Mortgage rates continued moving higher today as Fridays unfortunate series of events seems to have motivated a big bounce.  What events are those?  Namely, we're talking about several important economic reports including the big jobs report and the most closely-watched manufacturing report from ISM.  These were joined by two other supporting actors (Consumer Sentiment and Factory Orders) to round out an entire morning of data that came in much stronger than expected.

But wait... why is strong economic data a bad thing?!

A fair question!  After all, don't we like a strong economy?  If by "we," you mean the average person on the street, then yes!  If, on the other hand, you mean mortgage rates (or simply those who would prefer to see mortgage rates fall), then no... a stronger economy is the enemy.  Reason being: rates are driven by bonds, and bonds tend to outperform when investors are seeking protection from risk, or simply when there's reason to doubt the ability to earn decent returns elsewhere.  And there's nothing like economic weakness to create that doubt!

Simply put, weaker economy = lower rates, and vice versa. 

Friday's economic data was particularly striking in light of the Fed's announcement on Wednesday which called out economic risks at home and abroad as justification for being patient with rate hikes and generally friendly with policies that benefit the bond market.  As such, surprisingly strong data caused investors to call the Fed's stance into question, and we've since moved almost perfectly back to levels seen just before the Fed.  In other words, this has been logical weakness, even if it's unpleasant for fans of low rates.

The good news is that US Treasury yields have been suffering more than mortgages.  Apart from the last 3 business days, rates are still in line with their lowest levels in months.