Mortgage Rates continued sharply higher today, as financial markets quickly adjust their outlook for global monetary policy. Two and a half months and no changes in stocks and bonds. Today that ended when the 10yr broke out of its range and stock indexes followed. I have been letting everyone know here over the last few weeks that when the trading range on the 10yr was violated the move would be swift and deep. The 10yr yield increased 6BPS yesterday and 7BPS today, MBS prices the last two sessions down 55BPS.Lots of angst in the stock market now on the renewed thought the Fed will move in less than two weeks. Some of the most credible voices at the NYSE wringing their hands and still holding the Fed will hold pat on the 21st. Certainly based on the past performance from the Fed that idea of no increase has a little merit.Earlier this week we noted that the Fed would not drop a bomb on markets when it finally decided the time was here to make the move. The Fed goes out of its way to telegraph its intentions, not wanting to set off a panic surprise. We believe the messages may have been sent today. A couple of grenades were tossed. Eric Rosengren a previous dove leading FOMC member, Fed governor Daniel Tarullo on CNBC not tipping his hat but equally not refuting the question. On Monday a quickly conceived speech from Lael Brainard will speak. Usually on the dovish side, it really will be interesting on what she says.We have a big week next week. When it is all said and done, it should be clear what the Fed will do on the 21st. Lots of key data along with our current view the Fed is setting markets up for a move as early as the 21st. We are definitely the Lone Rangers for an increase in September and we will not make trading decisions based on our views; have to base decisions on market movements not speculation. In summary, this is the biggest threat we have seen to the low, narrow rate range of the past 2 months. The only safe bet here is to plan for rates to continue to move higher until and unless they prove they can do otherwise. This may end up being a head fake, with markets settling down next week, but I would not plan on that.