If there's one MortgageLogic.news story that should be circled, highlighted, and laminated, this is it.
What follows is a cornerstone of mortgage planning, and that's no exaggeration, because by ignoring it, a mortgage advisor has failed their clients. No ifs, ands, or buts—just a lot of awkward silence at renewal time.
It's a concept that baffles all too many in our business, until someone translates it into plain English. Well, here is that explanation, in a way you've never heard before, offered in the hope it sharpens your ability to serve clients.
Friday changed the outlook
We'll start with last week's rate action because it's illustrative of a key point.
Friday's employment train wreck sent yields tumbling and cranked the sentiment knob almost all the way to "#dovish#."
That’s quite a pivot from the recent focus on inflation and fiscal overspending.
In fact, it wasn't long ago that overnight index swaps (#OIS#) weren't even pricing in half a rate cut, let alone the 2+ priced in today.
It makes a sane person wonder, what good are policy rate derivatives for forecasting if they can be this wrong, this fast?
Every mortgage advisor worth their credentials has to grasp the answer, or they’re effectively giving clients directions with a blindfold.
