U.S. bonds are having a tough end to a bad week. With chatter growing throughout the week about a December rate hike, the spectacular October jobs report has made a December rate hike feel like almost a done deal. The October payrolls grew by 271,000, well more than expectations of 185,000. The unemployment rate fell one-tenth to 5%, and the closely watched employment participation rate (U6) fell to 9.8%.
U.S. Treasuries are getting clobbered Friday morning with the 10-year treasury yielding 2.30%, and the 2-year treasury spiking to .91%, a level not seen since May 2010.
With adjustable rate mortgages (ARM) still very attractive and fixed rate mortgages still near 4%, we are strongly biased toward locking in interest rates.