Mortgage Rates (3 Viewers)

[Chadstroma]

Trade deal announced with China. Our tariffs down to 30% and theirs 10%. It seems to be a win. My question is do we get the final agreement out of the 90 day window that will go well beyound tarriffs and adress the Chinese unfair trade practices... I am betting it will and if it does, it is a huge win for the US.

10 year yield up in response.

Which is a bit weird as you would think this would be deflationary.

If you thought the tariffs would slow down the economy, which I think was the prevailing opinion, that would have been deflationary.

Most thought the tariffs would increase the cost of goods which is inflationary.

As with most things about economics, you can over simplify things in many different ways and usually it is more complicated because things happen very rarely with one cause and one effect. I think my post was oversimplified and also misleading (saying yield up in response). Often times when stock market tanks, yields lower as bonds are bought. When stock market rises, bonds have to pay more to attract buyers. I think that is the main driver here. This seems to be due to the agreement and some other positive economic data. So, more like the market increased in response and then in response to that the yield increased. Also investors looking ahead to the Fed meeting. I am sure there were other factors.