We’re kicking off a busy week filled with significant economic reports and a much talked about Federal Open Market Committee meeting. We could see rates adjust several times so it’s important for borrowers to pay attention to the news this week. Read on for more details.
Where are mortgage rates going?
Federal Reserve takes center stage
We have a much anticipated Federal Open Market Committee (FOMC) this week, starting on Tuesday and ending on Wednesday afternoon.
[tmslink name = “rates”]
There is a unanimous expectation that the Fed will opt to raise the nation’s benchmark interest rate–the federal funds rate–by a quarter point, bringing the target to 1.25%-1.50%.
That change, however, is hardly going to be the highlight of the meeting as financial markets have had that rate increase priced into their positions for quite some time now.
Instead, what investors will be most interested in is the outlook from the Fed for 2018. If the Fed comes out and paints an optimistic picture of the U.S. economy that includes multiple increases to the federal funds rate next year, that would likely push stocks and mortgage rates higher.
Conversely, if they come out with a statement that could be interpreted as overly cautious, investors might move more into bonds, pushing mortgage rates lower.
At this point, it does seem that the likely path for the Fed will be for a continuation of the policy of “gradual increases” to the federal funds rate, so long as the hard data remains strong enough.
Aside from the Fed meeting, we do have several important economic reports out this week including PPI-FD, CPI, Retail Sales, and Industrial Production, so we could see mortgage rates bounce around a little as investors digest all of the incoming data.
For now, though, it’s a somewhat slow start to the week with market participants mostly in a holding pattern as they get ready for FOMC meeting.
If we take a look at the yield on the U.S. 10-year Treasury note (the best market indicator of where mortgage rates are going), we can see that it’s just a hair down from where it opened the week.
Mortgage rates typically follow in the footsteps of the 10-year yield so it’s basically a flat start to the week.
[contentbox id=”6″]
Rate/Float Recommendation
Lock now
As stated above, it’s a busy week with the potential for mortgage rates to bounce around. The clearest risk to rising rates comes on Wednesday when the FOMC makes their concluding statement.
Given that rates are more likely to rise than fall (especially in the long-term), it makes sense for anyone looking to refinance or purchase to lock in a rate now.
Click here to head to our Mortgage Builder and figure out how much you could save.
Today’s economic data:
JOLTS
- 10:00am
10-Yr Note Auction
- 1:00pm
Get the GreenLight and close in 21 days*
Notable events this week:
Monday:
- JOLTS
- 10-Yr Note Auction
Tuesday:
- FOMC Meeting Starts
- PPI-FD
Wednesday:
- Consumer Price Index
- EIA Petroleum Status Report
- FOMC Meeting Ends
Thursday:
- Jobless Claims
- Retail Sales
- Import and Export Prices
- Business Inventories
Friday:
- Empire State Mfg Survey
- Industrial Production
[contentbox id=”3″]
from Total Mortgage Blog http://ift.tt/2iUzFTL
No comments:
Post a Comment