• The most reassuring sign for mortgages and housing: a damaging report did only modest harm.
  • However, the credit markets have overdone their hope for “no-Fed” for the rest of 2016. Data is strong enough that the Fed will have to take out some insurance -- probably not at its meeting on the 16th, but April and summer on the table again.

The most reassuring sign for mortgages and housing: a damaging report did only modest harm. The 242,000-job surge in February payrolls could have blown us up, but the 10-year T-note today is 1.90 percent, mortgages still in the high 3s. The 10-year from New Year’s Day to mid-February fell in a straight line from 2.30 percent to 1.66 percent and was certain to re-trace. Big gains in jobs and a flicker of inflation might have reversed rates altogether -- thus, holding here is good news. Friday's report did lose force in its large number of jobs in poor categories (retail), and slim 2.2 percent year-over-year increase in wages. However, the credit markets have overdone their hope for “no-Fed” for the rest of 2016. Data is strong enough that the Fed will have to take out som...