Tariffs

The potential impacts of import tariffs cloud the outlook, though, and could lead mortgage rates to surge and fall throughout the coming year.

The president's rough-and-tumble trade negotiations have throttled financial markets, causing investors to flock to the safety of dollars and Treasuries. But some economists say this style of policymaking could have hurt the U.S.'s safe haven status in the long run.

Wednesday brings the next pivotal data point, with the release of the latest consumer-price figures, which are forecast to show inflation remains sticky.

Tuesday's declines lifted yields by one to four basis points across maturities after Trump said he'd impose additional 10% tariffs on goods from China and 25% tariffs on all products from Mexico and Canada.

The global pandemic and stalled trade negotiations have discouraged farmers and ranchers from taking on more debt and made banks uneasy about extending more credit.

So far farm loans are holding up well, but bankers gathered at an industry conference this week said they are growing increasingly concerned that credit quality will weaken if the U.S. and China don’t reach a deal soon.