7% MORTGAGE RATES!!! What Happens NEXT???

SPEAKER_1 (0:00)

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Michael Zuber (0:32)

Seven percent mortgage rates are back. Yes, folks, today it is very likely we are going to post seven percent mortgage rates by mortgage business daily by end of day. What the heck is going on? Well, frankly, all the things that we've been discussing the last six weeks or so have been driving rates slower and activity lower. As I thankfully warned you, the last six months of 2026 were going to be ugly, going to be disastrous for the transaction business, and we are in it right now. So lots going on, lots of reasons to drive mortgage rates over seven percent today. We will start with oil.

Oil this morning, I haven't checked in the last half hour or so.

Brent was 105, and WTI or West Texas was just over $100, and seemingly screaming higher. There is now talk behind the shadows that this never-ending war with Iran could, could and may very likely continue throughout the rest of President Trump's second term, meaning another two plus years. This is what I have feared from the beginning. And should this continue and just continue to drag on, oil is going to be going higher as well. We've already drained our strategic petroleum reserves to the very bottom. Again, we don't have that to fall back on, so it is getting ugly out there in the energy complex. Next up, we got our first inflation reading of the month. We got PPI.

PPI headline came in at 5.4 percent. Prior month, 4.8.

That is going the wrong direction. Okay, what about core? Tell me about core, because you know, headlines got energy and oil and gas and diesel. Don't tell me about headline, tell me about core. Well, core came in at 4.6. Now, it too was up from the prior reading of only 4.2. So again, at least according to PPI, inflation is accelerating, not decelerating, and PPI is often a leading indicator for CPI. So again, if you look at the leading indicators for CPI, you do have ISM services, which is about six months ahead of time, right? There's some cost of goods inside ISM surveys. Then you have PPI, and then of course, CPI. CPI is the big number of the week. It has the potential to frankly guarantee a rate hike next week if it comes in hot. So we will be paying attention tomorrow for sure. Jobless Claims came in on the screws at 206 Again, nothing to see there. And the 10-year note, if you haven't checked this morning, 4.9. 492, I think. So again, we had seen it in a trading range where 4.8 was the high water mark. Scott Besson came out, what, two days ago and said, hey, Bond Vigilantes, I am the house. Bet against me if you want. And guess what? They did. And the Bond Vigilantes are winning. It turns out that the whisper number for the Bond buyback was not 5 billion, it was 10 billion. So as soon as he came out with that measly 6 billion, the bond market laughed, laughed, and rates shot higher. Now over 4.9 and seemingly screaming to 5%.

Yeah, 5% is certainly possible. It's frankly possible this week, probably more likely next week. But again, we shall see.

Let's talk about that AI doom that we heard about yesterday. Again, somebody at Anthropic who turns out to work there for 6 weeks, quit and wrote this nasty thing that's been amplified by other AI do-mers. Apparently, people are starting to get wise to the SIA. Apparently, it has been identified that Jacob Coxon is nothing but a shill for some negative AI firms.

Basically, he came out and said, don't underestimate the power of the technology, yada, yada, yada. And again, he is part of some cohort of do-mers, and this is nothing more than a SIA. So what I hope happens is, I hope some journalist out there investigates Jacob and all of his cronies, and they follow the money.

If they are being paid by a foreign adversary, like China, for example, and you can prove without a shadow of a doubt, they are just preaching the SIA from China, send them to jail. Send them to jail, right? This is national security stuff or, I don't know, whatever you want to call it, send them to jail. You got to make an example of these people. And if you can prove by court of law that they are guilty of espionage or whatever it is, send them to jail, and guess what? These foreign-based SIA would stop overnight. If you don't penalize these people, they're just going to keep doing it. And then we're going to get, then you're going to regulate AI to nothing, and quote unquote, China is going to win, and yada yada yada. So, I don't know. Hopefully, somebody takes it amongst themselves, goes, investigates this guy, holds his feet to the fire, threatens jail time, start having him name names of who paid him, and we can put this episode behind us. Because again, a 10% chance that all of us die in the next 10 years, that's not a message we want out there. We don't want killer robots in Terminator 2 or whatever it is. This is not good. We did get some earnings. Chewy, again, pet lovers out there, beat top line, bottom line, raised guidance, although free cash flow, did miss expectations. Signet, again, Julie Store, matched on revenue but beat on earnings and raised guidance. Again, the consumer must be strong if you all are buying jewelry. Wealthfront beat on revenue, missed on earnings, although did hit 100 billion platform milestone. And then finally, American Eagle, beat top line, bottom line. Same store sales, up 6%.