We’re having trouble in the islands. The first one is large with few inhabitants. The US’s attempt to take control of Greenland and impose tariffs on the entire European Union until Denmark relinquishes control of the icy landscape and her 57,000 inhabitants is being met with much resistance and disdain. That’s weird right? History shows that most countries love being conquered by a new sovereign and used as pawns in a ploy to gain greater global power. Usually mortgages thrive on political unrest. And maybe driving down interest rates is part of Trump’s Master plan. But the inflationary threat that tariffs Bring to the table are super seating any other gains.
The second island is almost 6 times smaller than Greenland, yet has 2100 residents for every one that live in Greenland. We’re talking about Japan. The land of the rising sun is the highest indebted country per capita in all the world, and this morning, their interest rates have risen to an all-time high. Where Japan has the fifth largest GDP in the world, top four global currency, and seen as the fourth most influential country in the world (thank you anime), their rising interest rates are having a detrimental effect on mortgage pricing today.
The uncertainty is driving stocks down, but only just, and gold is up 4% in the first two hours of trading this morning. The 10 year yield has risen 0.13% since Friday and now sits at 4.27%. MBS have lost 50 BPS over the same timeframe, putting upward pressure on mortgage rates. So get them while you can!
