I simply don't see the impetus for higher rates. One more tepid job report chock full of low wage summer jobs? Mortgage applications dropped significantly with the knee-jerk upward rate move and if the rate moves up much more at all activity will just evaporate. Overall demand is weak - the Fed most definitely does NOT want to see rates spike up and choke off the housing activity and most likely tank the overall economy again. They've just spent the last 5 years trying to avoid that and I have a hard time seeing them allowing rates to run away here - even though I think they will subside on their own simply because the demand is not there to keep them up. All this for a hint of possible tapering boosted by a barely mediocre jobs number that will probably move the other way soon.
imo, the fed is trying to get one last bite out of this 33 year bond bubble. Wow, what other bubble has lasted 33 freaking years? That alone speaks volumes. But i digress. Imo, fed will let rates go to 3.5 on the 10yr, which should translate to 5.5% on the 30 year mortgage ( currently 10yr @ 2.72, 30 year mort @ 4.5 ). THEN.. benny will print his butt off to stomp on the rates.... crushing them back under 2. = Mort. back to 3.5... everyone will be happy, reits and market in general will fly.