First thing’s first: mortgage rates  didn’t have nearly as bad a day as US Treasuries.  The latter serve as a general benchmark for the former, but can take cues from different sources with varying levels of intensity.

Today’s most widely-discussed cue was yesterday afternoon’s release (or “leak”) of Trump’s tax plan.  It’s essentially a thorough bullet-point list that serves as a starting point for a drawn-out legislative process.  At the end of the day, actual tax reform may be quite a bit different than the details being circulated today.  That fact may help explain why there wasn’t a bigger, more unified reaction in other markets (like stocks).

More simply put, if rates were truly reacting exclusively to the promise of economic strength due to tax reform, we’d expect to see movement in other markets to corroborate that story.  Instead, stocks and bonds were fairly disconnected–especially overnight  in Europe, when most of the weakness in bond markets happened.

Thankfully, the weakness in broader bond markets didn’t transfer to mortgage rates any more than it did.  The average lender only saw a set-back of several days, thus leaving rates in line with last week’s higher levels.  be aware though, rates could easily continue higher tomorrow as the mortgage world gets caught up with the broader bond market.  Bottom line, today’s bond market weakness raises the risk of additional momentum toward higher rates.