“Why don’t you tell rumors in a Botox Clinic? Nobody raises an eyebrow.” Who can keep track of the rumors out there, like a combo of a well-known real estate search engine and a company that exited wholesale a few years ago? (Totally unsubstantiated, unlike the actual Luminate/NJ Lenders news below!) Who can keep track of thousands of products from hundreds of countries to tax them? In yet another change, smartphones, computers, and other electronics are exempt from Trump’s reciprocal tariffs, for now. It’s difficult hedging a mortgage pipeline; try being a purchasing manager for a car maker! Or a homebuyer or builder: Canada and Mexico, respectively, are important sources of softwood lumber and gypsum (used in drywall). China is an important source of steel and aluminum, as well as a supplier of home appliances and other products used in residential construction. Many of the raw materials and goods sourced from China are already subject to tariffs. It is important to note that Canada, Mexico, and China are the United States’ three largest trading partners. Economists at the National Association of Home Builders (NAHB) project that the proposed new tariffs on Mexico and Canada, along with the recently imposed tariffs on China, could raise the cost of imported construction materials by more than $3 billion. (Today’s podcast can be found here and this week’s are sponsored by BeSmartee, transforming mortgage lending with Bright Connect, its native mobile app designed to boost loan officer productivity, speed up referrals, and simplify the borrower experience. Hear an interview with TrustEngine’s Dave Savage on the evolution of the industry since he entered more than three decades ago, how he’s driven to make an impact, and more tidbits from one of the most recognizable names in mortgage that you won’t want to miss.)

The Consumer Financial Protection Bureau said it will not enforce or supervise nonbank financial firms that miss upcoming compliance deadlines for the nonbank registry of repeat offenders.

In a sign of how Treasuries’ status as a global haven during times of turmoil may be fading, rates on longer-term debt soared last week as equities convulsed, turbocharging bets on a steeper yield curve.

A bill being introduced by Sen. Catherine Cortez Masto, D-Nev., would compel the Federal Home Loan Bank System to contribute 30%, or a minimum of $200 million, of each bank’s net earnings into affordable housing or other community development programs.

President Donald Trump unleashes an all-out assault on global trade, the status of Treasury bonds as the world’s safe haven is increasingly coming into question.

A version of the Neighborhood Homes Investment Act has been introduced in three prior sessions of Congress, but has never made it through the process.

The Consumer Financial Protection Bureau had accused the Dallas bank of “deliberately disconnecting 24 million customer service calls” among other “unfair” acts. But the motion to dismiss allows the CFPB to refile the case again.

The Federal Housing Finance Agency ended comments on expanded suspended counterparties list criteria in December and has done nothing with it since.

Rough Week For Bonds. No Help From Friendly Data

Bonds managed to recover modestly after the initial yield spike in the morning hours, but nonetheless earned the honor of seeing the biggest week over week jump in 10yr yields since 1981 (note: some outlets are saying 2001 or 1987, but we’re not seeing that, and it doesn’t really matter.  It was a rough week, is the point). Looked at as a 2 week time frame, and it was on par with many other recent examples of moderately brisk selling.  That leaves the upcoming week and a half in a great position to let us know how freaked out we should be. 

Econ Data / Events

Core MM PPI

-0.1 vs +0.3 f’cast, 0.1 prev

Core YY PPI

3.3 vs 3.6 f’cast, 3.4 prev

Consumer Sentiment

50.8 vs 54.5 f’cast

1yr inflation expectations

6.7 vs 5.0 previously

5yr inflation expectations

4.4 vs 4.1 previously

Market Movement Recap

09:34 AM Losing ground despite softer PPI.  MBS down more than a quarter point and 10yr up 6.4bps at 4.496

12:51 PM Nice reversal off weaker levels.  MBS now down only an eighth  and 10yr up only 2.2bps at 4.45

02:35 PM Fizzling sideways now.  MBS down 7 ticks (.22) and 10yr up 6.7bps at 4.499

Versions of the bill were introduced in the House and Senate, raising odds that a national trigger lead ban could be near.