Drama in Washington D.C. combined with anxious investors awaiting a decision on the next Fed chair is causing a mild retreat for Treasury bonds and mortgage rates this morning. We have a very busy week ahead with several notable events that could push mortgage rates higher or lower. Read on for more details.
Where are mortgage rates going?
Rates slightly lower to start very busy week
There are busy weeks and then there are busy weeks. We’re currently at the start of the latter. Looking at the economic calendar, it’s obvious that it’s going to be a data-heavy week with a handful of important economic reports to be released.
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The most notable report is of course the Employment Situation (a.k.a. the monthly jobs report) on Friday. That report is consistently one of, if not the biggest, market moving report every month.
Investors will certainly be watching to see how the labor market is doing, making it likely that rates will adjust on Friday morning after the news breaks.
Normally, the monthly jobs report would be the highlight of the week, but that’s not the case right now. Ahead of that report we have several other notable events.
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First up is the Federal Reserve’s Federal Open Market Committee meeting on Tuesday and Wednesday. All of the action will take place on Wednesday with their concluding written statement (there will be no Janet Yellen press conference this time).
While no one is expecting that they will make any changes to monetary policy, what the FOMC says in the written statement could clear the way for action in December.
The CME Group’s Fed Funds Futures already have the chances of a quarter-point increase to the federal funds rate at the December meeting at 98%, so it’s not like there’s a lot of persuasion that has to happen; however, a formal nod from the Fed would still be welcomed by market participants.
Next up on Thursday is arguably the biggest story of the week: President Trump’s nomination for the next chair of the Federal Reserve. According to a story from Politico, it’s likely that we will get an announcement on Thursday.
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As for who he will nominate, the clear front-runner right now is current Fed Governor Jerome Powell. While he does seem to be the top pick at the moment, sources are saying that the decision is not set in stone.
One thing that is nearly certain is that a market reaction will happen after his nomination goes public. We’ve seen the markets spike and drop these past few weeks off of the slightest hint or clue about who Trump will nominate, so we can only expect to see some turbulence after the final decision drops.
Also in the news this week is the continuing situation surrounding the Republican led tax reform effort. At some point over the next few days the bill will be unveiled and we’ll finally get a closer look at the new plan.
Optimism about corporate tax cuts has helped lift the stock market the last two weeks, and helped push Treasury bonds and mortgage rates higher. Depending on the details, we could see that trend continue this week.
The good news for borrowers right now is that there is a slight risk-off scenario in the markets as financial market participants wait for the key reports later in the week and also digest the news that President Trump’s former campaign manager was indicted today on a handful of charges.
Rate/Float Recommendation
Lock in your rate
It’s more likely than not that mortgage rates will finish the week higher than where they are right now. For that reason, we are recommending that anyone looking to purchase a home or refinance locks in a rate sooner rather than later.
Click here to head to our Mortgage Builder and figure out how much you could save.
Today’s economic data:
Personal Income and Outlays
Personal income rose 0.4% month over month, while consumer spending went up 1.0%. The PCE Price Index moved up 0.4% month over month, bringing it to 1.6% year over year. The Core PCE Price Index ticked up 0.1% month over month, putting it at 1.3% year over year.
Dallas Fed Mfg Survey
The Dallas Fed Mfg Survey came in at a very strong 27.6 for October.
Notable events this week:
Monday:
- Personal Income and Outlays
- Dallas Fed Mfg Survey
Tuesday:
- FOMC Meeting Begins
- S&P Corelogic Case-Shiller HPI
- Chicago PMI
- Consumer Confidence
Wednesday:
- ADP Employment Report
- PMI Manufacturing Index
- ISM Mfg Index
- Construction Spending
- EIA Petroleum Status Report
- FOMC Meeting Announcement
Thursday:
- Jobless Claims
- Productivity and Costs
- Fedspeak
Friday:
- Monthly Jobs Report
- International Trade
- PMI Services Index
- Factory Orders
- ISM Non-Mfg Index
- Fedspeak
Contact us today to see if we can save you money on your home payments.
from Total Mortgage Blog http://ift.tt/2ifzdPf
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