Lykken on Lending

Show notes: TMSpotlight: 09-30-2024 Does "New Dawn Fade" For Fed? ------------- A change of ease, a change of spreads. A change of speed, with no regrets. Will the Fed’s New Dawn Fade with the Dollar as the perpetual reserve currency and no economic landings?  That is, a stable US economy with 3% growth, 3% inflation, and no more … [Read more...]

Show notes: TMSpotlight: 09-23-2024 "A Day In The Life" Of Powell ------------------- Locks up, fallout is dead. Drag new locks across the hedge. The Fed’s 50 bps rate cut signals concerns about the labor market. However, Chairman Powell downplayed the likelihood of further outsized rate cuts. Mortgage rates rose in response. The era of … [Read more...]

Show notes: TMSpotlight: 09-16-2024 "Wooden Ships" Calm Seas, Prepare for Unexpected ------------------------ Wooden Ships above the oil, barely free. Easy, Bonds know the way it’s supposed to be. Gold rose sharply above 2600, an all-time high, in fear of a broader war. The US and NATO signaled they will arm Ukraine with long-range missiles. … [Read more...]

Show notes: TMSpotlight: 09-09-2024 Jobs are the "Rock Brigade"-----------------------Jobs are bangin' on their drums, bangin' on Bonds’ door, wavin' their flags, tellin' Bonds to score. Watch out for the Rock Brigade. On the eve of Fed easing, inversion ended between the 10-year and 2-year Treasury Notes as Job weakness gained momentum. Flash … [Read more...]

Show notes: TMSpotlight: 09-02-2024 "Pour Some Sugar on Me," It Relieves Boredom----------------------Pour Some Sugar On Three. Two, escape inversion. Pour some sugar on One. Come on, hit zero. The countdown to the end of inversion goes through mechanical boredom despite anxiety by market participants. The dynamic tension coexists within … [Read more...]

Show notes: TMSpotlight: 08.26.2024 "The Weight" Takes Time--------------------------Take a load to Fannie. Take a lock for free. Ship The Weight to Ginnie. Our target of a sub-6% mortgage is 50 bps away. Softening Jobs and receding inflation expectations give credence to the FOMC minutes and Powell's speech, signaling a September ease. Market … [Read more...]

Show notes: TMSpotlight: 08-19-2024 Lags Happen, So "Knockin' On Heavens Door"---------------------------Job’s long black cloud is comin' down. Bulls are Knockin' On Rally's Door. Will recession odds rise faster than falling inflation expectations? The bond market expects the Fed will ease multiple times before Dec 31. Yet, uncertainty abounds … [Read more...]

Show notes: TMSpotlight: 08-12-2024 "Always Crashing in the Same Car" Into The Bear Wall --------------------- The market’s going ’round and ’round the DATA garage Must have been getting close to 3.44. The struggling Dollar and Gold’s sustained bullishness point to calamity ahead. Meanwhile, Crude Oil and Bonds do not expect WW3 within the … [Read more...]

Show notes: TMSpotlight: 08-05-2024 Mortgage Rates "Take It Easy" ------------------------- Fed is loose, and we will win Though let us never go back againSo open up, Loans climbin' inSo take it easyIn May when mortgage rates were 7.25, you heard me on Lykken On Lending say that mortgage rates would drop significantly before the end of … [Read more...]

Show notes: TMSpotlight: 07-29-2024 Stop Fretting and "Walk" ----------------------- Lenders remember the days.They built these paper mountains.Then sat and watched them burn.Data come and go that drive MBS prices up and down.   With the worsening economic conditions in Europe and soft US Housing, the curve twists and turns.  Lenders lost a lot … [Read more...]

Show notes: TMSpotlight: 07-22-2024 Bulls Say "Welcome to Paradise" --------------------- Dear Powell, Can you hear Jobs whining? It's been three whole years since inflation felt your hold. Despite declining volatility, the new bullish trend remains solid. News continues to affirm that two rate cuts make long-term rates happier … [Read more...]

Show notes: TMSpotlight: 07-15-2024 "Espresso" ------------------------The markets movin’ in a tight range. Isn’t that sweet? Try not to sleep. Don’t you need Espresso? Some news gives you a jolt. Then you see the screen blink red and green because it's speculating about nothing. No easing, high inflation. High easing, no growth. No liquidity. … [Read more...]

Show notes: TMSpotlight: 7.08.24 Liquidity is running dry, "It’s So Lonesome it Could Cry."---------------------Hear that lonesome Repo well. It sounds too low to fly. Last week, the implied likelihood of a September Fed rate cut rose to 73%. Over a week ago, it was 62%. Bonds cry for a “higher for longer” Fed. But the fall of the dollar and … [Read more...]

Show notes: TMSpotlight: 7.1.24 Segmentation, disinflation, pro-inflation; obligation, "Ball of Confusion" ----------- People selling out, people buying in because of the color of their screens. With the Fed listening to Bonds and data, look for 30-year mortgage rates to stay below 7.75 and reach 6% by yearend while the 10-yield … [Read more...]

Show notes: TMSpotlight: 06-24-2024 Affordability Remains an Obstacle and Servicing values will Drop, it's a "Ball of Confusion" ----------- People selling out, people buying in because of the color of their screens. With the Fed listening to Bonds and data, look for 30-year mortgage rates to stay below 7.75 and reach 6% by yearend … [Read more...]