bonds slumping again ...

In the wake of the NAHB housing numbers, bonds are selling off. Long bond futures were recently down 8/32, after being up a few ticks before the PPI figures this morning. Ten-year Treasury yields were recently 4.77%. That's roughly even with the multi-month high seen a couple days ago.

Now, here's something to ponder: IF the recent improvement in mortgage activity and the NAHB figures stemmed from the late summer/early fall decline in interest rates ... then won't the rise in interest rates since December 4 hurt lending and sales? Put another way, is the housing market bounce sowing the seeds of its own unwinding by sidelining the Fed and/or prompting rates to rise?

Makes your head spin, doesn't it?