This has absolutely nothing to do with last week’s Fed rate cut, but the verbiage in their announcement did have an affect.? And as always, other economic factors played a role.? Chinese officials were cited as questioning the viability of the much-touted trade deal that took place last week.? The trade deal is important to financial markets because it’s thought to be an easy way to increase global economic growth–something that is typically bad for rates.? As such, the questioning of the deal was good for rates.
On top of that, there was also an exceptionally weaker economic report out last week – one that’s often seen as a bit of an advance indicator of several other important reports coming out in the next 3 business days.? The bond market continued to rally (i.e. yields moved lower) after that.? Ultimately, mortgage lenders had seen enough to adjust rate sheets for the better.? The average lender is at least an eighth of a percentage point lower than they were last Monday, and that’s about as big as day over day changes get, outside of extreme cases.