The Power of a Tweet…

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Filed under: Market Comentary

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This morning, I want to talk again about how small, simple things from our politicians can impact bigger trends economically. Sometimes we see the markets and rates whipping around because of one statement or another.

Yes, big economic changes can have an impact on interest rates, but some of the smallest indicators also play a role in the trends that are happening in the markets. These fluctuations show the sensitivity of where we are in the market right now.

Political News that Impacts Interest Rates

In the political news yesterday, people were talking about whatever our president may (or may not) have said about Ukraine. Everyone got all fired up about it, and the online chatter actually seemed to help rates a bit.

Then this morning, in what appears to be a bit of a head-fake, we see a Tweet talking about how we may see resolution out of China sooner than we thought. All of a sudden, it’s not good for interest rates. This single Tweet from our president shifted things, and the interest rates responded.

What Does it Mean for You?

A few points I want to make:

1. Political Conversation Impacts the Markets: You would be blown away if you could see how much the markets move with the smallest shift in the political conversation. Daily, I watch the mortgage bond trades – it’s unbelievable how you can see the market zig-zag around as the market responds to Tweets or whatever else might be said out there.
2. Specifically About China: if you talk to the smart bond people out there, they are all talking about two geopolitical things: our relationship with China and Brexit. By all accounts, if China and the US come to an agreement, it is going to drive rates up. Be careful right now with rate locks. Choosing a floating loan means that you are playing with fire.

If you are in the process of buying or refinancing, lock your loan. In my opinion, there is too much volatility. You’re at risk of interest rates going up depending on the way things play in the political and economic news.

Are you ready to lock in a great rate? Talk to me about your options. I love helping people find the best rates for their circumstances, and I’m here to provide personalized recommendations.

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