Mortgage bonds are currently trading down 38 basis points after yesterday's 28 basis point recovery.

This is primarily driven by Philly Fed President Plosser who said "inflation is too high."  As we've discussed, bonds hate inflation and mortgage rates go up in times of higher inflation.  Mr. Plosser continued, stating that the Fed must "back up their words with action."  That means rate hike.

Watch for continued volatility.

I hate to sound like a broken record, but mortgage rates are higher today for both Chicago conforming mortgages and FHA mortgages.