Mortgage Rates Sharply Sideways

When is interest rate momentum flatter than you can possibly imagine?  Today.

We only break out the sarcastic and paradoxical juxtaposition of "sharply sideways" when things have really ground to a halt and with each of the past 3 days falling inside a 0.01% range, it's that time again.  

This happens, but it's rare.  And it's especially rare when rates have moved at one of the fastest paces on record in the preceding 6 weeks.  

Does it mean anything significant?  It doesn't mean anything bad. In fact, it's arguably a good thing for rates to be able to hold a stable, sideways range that's right in line with the lowest levels in 7 months WITHOUT any token attempt at a corrective bounce.  

In other words, it wouldn't be a surprise to see rates jump a bit after falling as much as they had by last Thursday.  If there's an x-factor that helps explain the phenomenon, it could be as simple as the second half of December typically being a lower conviction trading environment. 

A word of caution: a recent track record of low volatility is not a guarantee that it will continue.  The late December trading environment can also be prone to random volatility, but if that happens, it wouldn't likely be on a grand scale.  Those sorts of bigger risks and opportunities would require input from the more important economic data in the first half of January.