Oil Shock and Mortgage Rates Update

Oil Shocks, AI Disruption, and the Markets Navigating Uncertainty

From Corona, California, and Newport Beach, KP checks in during a week where geopolitical conflict, oil supply disruptions, and economic data collided to create a confusing moment for markets. Normally, global conflict triggers a flight to quality that pushes bond yields lower and improves mortgage rates. But this time, the bond market reacted differently because the shock came from the oil supply chain—reviving concerns about energy-driven inflation.

In this episode, KP breaks down how tensions affecting global shipping routes and oil supply are influencing interest rates, inflation expectations, and the broader financial markets. He explains why the bond market briefly signaled lower rates before geopolitical events pushed yields higher again, and what the movements in the two-year and ten-year Treasury yields may be telling us about the Federal Reserve’s next moves.

KP also dives into the growing role of artificial intelligence and technology investment, highlighting massive capital flows into AI infrastructure and chips. These investments are reshaping supply chains, corporate strategy, and the future of productivity across industries.

At the same time, the housing market is entering the critical spring purchase season. KP shares real-time insights from mortgage industry activity, including rising lock volumes, improving mortgage spreads, and why the coming months could be much busier for lenders and homebuyers alike.

Episode Highlights:
00:00 – Why this geopolitical conflict didn’t trigger the usual “flight to quality” in bonds
01:00 – Late-night market update from Corona, California
02:30 – AI disruption and the idea of “disintermediation” in software
04:00 – Geopolitics, drone warfare, and the oil supply chain shock
05:40 – Why oil shipping disruptions impact inflation and interest rates
07:00 – Signals from the two-year Treasury and what markets expect from the Fed
08:40 – GDP slowdown, inflation trends, and what it means for mortgage rates
10:00 – Stock market vs. bond market rotations
11:00 – AI demand, Nvidia chips, and the technology arms race
13:20 – Jobs report surprises and the return of market volatility
15:00 – Oil prices, energy inflation, and mortgage rate implications
16:40 – Spring purchase season and rising mortgage lock activity
18:00 – Why markets may still be navigating a “soft landing.”
19:00 – Looking ahead to Fed meetings, economic data, and housing demand

In uncertain markets, understanding how money flows between energy, technology, and bonds can reveal where rates—and opportunity—may move next.

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