UMBS woke up on the positive side of the bed – for once. 5.5 coupon is up 17 bps on the day.

Bonds began the overnight session with a small, friendly correction in Asia. European trading brought 2-way volatility with a modest rally at first, then a move up to even higher yields than yesterday before a gradual rally heading into domestic hours.

Investors are waking up to a stark realization that the Fed’s work is not done, and that interest rates may have to be hiked even higher to cool hot inflation

In 22Q4, for the first time since at least 1974 when data became available, the quarterly number of housing units built-for-rent at 133,000 exceeded the number of single-family units built-for-sale at 126,000. Historically, the only times these numbers came close were during the recessions of 1982 and 2008/09 when single-family production collapsed. Single-family built-for-sales starts are down about 40% from their recent peaks, built-for-rent activity is nearing its 1986 high.

Federal Reserve officials continued to anticipate further increases in borrowing costs would be

necessary to bring inflation down to their 2% target when they met earlier this month, though almost all supported a step down in the pace of hikes.

“Participants observed that a restrictive policy stance would need to be maintained until the incoming data provided confidence that inflation was on a sustained downward path to 2%, which was likely to take some time,” according to the minutes of the Jan. 31-Feb. 1 gathering released in Washington on Wednesday.

The minutes also said “almost all” officials agreed it was appropriate to raise interest rates by 25 basis points at the meeting, while “a few” favored or could have supported a bigger 50 basis-point hike.

Results released yesterday show a recent four-day workweek trial in the UK had 56 of 61 participating companies continuing with the policy. The study, conducted from June to December, included 2,900 employees from a range of industries, with the average workweek around 32 hours and compensation kept the same.

The results showed 71% of employees reported less burnout, 39% less stress, and 60% better work-life balance. Fewer workers quit or took sick days compared to the same period in the previous year. Among the 23 companies that shared sales numbers, the average revenue grew 1.4% during the trial.

In the US, legislators in Maryland this week proposed a five-year, four-day workweek pilot program in exchange for tax credits for participating businesses.

Mortgage Peeps – Follow us on Facebook (below or #DuaneKayeWTMS) or Twitter (@MakesYouSmarter) for daily rate lock updates.