Mortgage bonds prices

Mortgage bonds prices are lower this morning pushing rates higher following remarks from a Fed official. Atlanta Fed’s Lockhart said this morning that the Fed will need to raise rates to counter inflation even with high unemployment. “Good policy, even in circumstances of unacceptable levels of unemployment, may incorporate higher interest rates. The time is approaching when it will be appropriate to consider recalibrating interest rate policy.” The ADP employment report showed a 55,000 job increase in May. This was near expectations. However, the April figure was revised from up 32,000 to up 65,000, definitely not bond friendly. Revised Q1 productivity was up 2.8%, lower than the expected 3.4% mark. Weekly jobless claims came in at 453,000, very close to the expected 450,000 mark. Overall the data isn’t helping us counter the Fed official’s remarks