Stop me if you've heard this one before, but the bond market is in the midst of a big-picture correction from the all-time lows seen in the middle of 2020.  The correction has taken the form of modestly-sloped 'trend channel' (parallel lines marking higher highs and higher lows in Treasury yields).  A week ago today, yields bounced at the lower end of that trend channel, thus introducing the risk of a move back to the other side (the higher side!).  Resilience on Friday and Monday offered hope that yields could find a lower ceiling before making such a move, but based on bond trading within the past 48 hours, the risks remain.

Hope remains as well, due to the fact that yields are still technically trying to hold under the 1.125% level which has provided support on 9 of the past 17 trading days.  

Of course these are just Treasury yields whereas our focus is on the mortgage market.  If we're looking for perspective, the bigger picture reality is that one of these things has not been like the other in the past year.

That's great to see, of course, and it's been even better to be a part of (for those working in the mortgage industry), but it's old news.  The NEW news is that Treasuries and mortgage rates have increasingly been reconnecting.  So when Treasury trends are pointing toward higher rates, mortgage rates face similar risks--even if by smaller degrees.  Here's the same chart zoomed in to the past few months and re-scaled to show the correlation.