Bernanke comments are pressuring rates higher

Fed Chairman Bernanke’s comments on Capitol Hill earlier today are weighing on interest rates today.  He mentioned that the Fed may begin to wind down quantitative easing (QE) at one of its “next few meetings”.  QE pumps $85 billion per month into the bond market which drives yields on US Treasuries and mortgage rates lower.  US Treasury yields and mortgage rates tend to move in unison.  The chart below shows the 10-year treasury yield jumping ~.125% today so we’d expect mortgage rates to do the same.

10yr treas 05-22