Bad economic news is good for mortgage rates

The Bond markets are soaring this morning after the government reported that there were 96K jobs created in August, well below the 130,000 that was expected. Bad economic news tends to push investors into safer assets like Bonds.

Looking further into the report it showed that the Labor Force Participation Rate (LFPR) fell to a 30-year low. The LFPR is the percentage of working-age persons between the ages of 16-64 in an economy who are employed or are unemployed but looking for a job.

Ideally, I would like to recommend a Floating bias until the middle of next week, as headline risk picks up once again.

Leonard Winslow
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