We’re seeing a slight retreat in the bond market after the push higher for yields based on some optimistic comments from the chair of the Federal Reserve yesterday.
Looking at the long-term situation, mortgage rates are still expected to rise, so most borrowers trying to purchase or refinance will get a better deal by taking action soon. Read on for more details.
Market Outlook 2.26.18 from Total Mortgage on Vimeo.
Where are mortgage rates going?
Powell paints picture of steady rate hikes
Yesterday the current chair of the Federal Reserve, Jerome Powell, went before the House Financial Services Committee as part of a semi-annual testimony. Most analysts walked away from the testimony fairly satisfied with the way Powell handled himself.
The written statement was right in line with what was expected, and even his answers in the Q&A didn’t cause most policy experts to adjust their positions.
[tmslink name = “rates”]
The one critique that seemed to pervade discussions on his performance was the fact that he played up the strength and growth of the U.S. economy to the point where he was hinting at four rate hikes in 2018.
This did create some jitters in the markets, somewhat unnecessarily, according to several pundits. There was really nothing for Powell to gain from this move and it only sets the stage for him to have to walk back these comments in the future.
Based on these remarks, we did see the yield on the 10-year Treasury note (the best market indicator of where mortgage rates are going) move up a few basis points. Mortgage rates typically move in the same direction as the 10-year yield and similarly edged higher yesterday.
Today, the 10-year yield is down about one basis point but still higher than where it started the week.
| [contentbox id=”10″] |
Rate/Float Recommendation
Lock in a rate soon before they rise significantly
Mortgage rates are having one of the smoothest weeks of 2018. There’s still a lot of time left before the weekend but all signs point toward rates staying within a tight range this week.
Learn what you can do to get the best interest rate possible.
Given that rates are expected to continue rising throughout 2018, there is a clear cut case for why you should try to lock in a rate soon if you have plans to purchase or refinance. The longer you wait, the more likely your rate will be higher.
Today’s economic data:
GDP
The second estimate for fourth quarter GDP is in at 2.5%. That’s one tenth below the previous estimate of 2.6%. Similarly, the GDP price index is down one tenth from the prior reading to 2.3%. Real consumer spending remained the same at 3.8%.
Chicago PMI
The Chicago PMI hit a 61.9 in February. That’s several points lower than expected, landing just outside the low end of the consensus range.
Pending Home Sales Index
Pending home sales fell 4.7% in January, putting it at 104.6. That’s a big miss from the 0.3% rise that analysts had projected.
EIA Petroleum Status Report
For the week of 2/23/18:
- Crude oil: -1.6 M barrels
- Gasoline: 0.3 M barrels
- Distillates: -2.4 M barrels
[contentbox id=”8″]
Notable events this week:
Monday:
- Fedspeak
- Chicago Fed National Activity Index
- New Home Sales
- Dallas Fed Mfg Survey
Tuesday:
- Durable Goods Orders
- International Trade in Goods
- Jerome Powell Testimony
- FHFA House Price Index
- Consumer Confidence
- Richmond Fed Manufacturing Index
Wednesday:
- GDP
- Chicago PMI
- Pending Home Sales Index
- EIA Petroleum Status Report
Thursday:
- Jobless Claims
- Personal Income and Outlays
- PMI Manufacturing Index
- ISM Mfg Index
- Construction Spending
- Fedspeak
- Jerome Powell Testimony
Friday:
- Consumer Sentiment
[contentbox id=”3″]
from Total Mortgage Blog http://ift.tt/2oCEuDG
No comments:
Post a Comment