Source: Mortgage News Daily

Is Credit Suisse still considered a "big bank"? Despite circling the drain for several months, the company still holds hundreds of billions in assets. There would be a big problem if it failed, and financial markets were asking that question very seriously today.

The impact of a systemic banking crisis on the financial markets tends to push stock prices and bond yields downward, other things being equal. Interest rates are also known as bond yields.

US Treasuries don't react as quickly as the bonds that underlie the mortgage market to these sorts of episodes, but the reaction was still quite significant. There was a return to the levels seen on Monday for the average lender. Over the past month, those rates were the lowest.

It depends on the emergence of additional banking drama and the inflation and economy's trajectory whether rates remain in this zone (or lower). Volatility should be elevated in the short term, regardless of the outcome.