It’s another week and it’s going to be a busy one. We’ve got numerous economic reports scheduled for release and a key testimony from the new chair of the Federal Reserve.
The good news is that current mortgage rates are improving today. With so much happening over the next few days, it’s hard to say where mortgage rates will be on Friday.
Still, with rates expected to move higher in the long-term our recommendation to borrowers is to lock in a rate soon.Read on for more details.
Where are mortgage rates going?
Rates ease to start the week
Here we go with another week. All signs point toward it being an extremely busy one, with plenty of economic data to sift through, as well as a trip to Capitol Hill for the new Fed Chair, Jerome Powell.
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Starting with the economic data we’ve got multiple reports out every day with New Home Sales out this morning, Durable Goods orders on Tuesday, GDP on Wednesday, Personal Income and Outlays on Thursday, and Consumer Sentiment on Friday.
We have seen the hype over rising inflation subside a bit over the past few trading sessions, with investors seemingly finding comfortable footing in this still fairly new year.
At this time, financial market participants are just expecting the data to come in strong enough to push forward the status quo of gradual rate hikes from the Fed.
We’re still looking at the March FOMC meeting as a sure thing for a quarter point increase to the federal funds rate. The CME Group’s Fed Funds futures is giving it about an 87.4% chance of happening.
That would bring the target range for the nation’s benchmark interest rate up to 1.50%-1.75%. Turning to the Fed, we’re going to get a glimpse into the mind of the current Fed Chair, Jerome Powell, on Tuesday and Thursday when he goes before the House and the Senate, respectively.
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The big focus is on Tuesday’s testimony, as he’s likely to say everything the markets are looking for during that engagement. Typically, these types of encounters are very even-keeled and diplomatic.
It’s not the time for a new Fed Chair to mark a stake in the ground and roil the markets. For Powell, this means reiterating the tone in the FOMC minutes last week with talk about a cautious approach to the gradual rate hike path the lies ahead.
Despite the overwhelming likelihood of a tempered discussion, financial market participants near and far will be tuned in to see what he has to say, which means there’s the possibility for a strong market reaction after the matter.
At this point, it appears most likely that a confident, measured, Powell will instill confidence in the markets, leading to a slight push higher for stocks and mortgage rates.
Taking a look at the yield on the 10-year Treasury note (the best market indicator of where mortgage rates are going) we can see that it’s down a few basis points to 2.83%.
This is now the third straight session where the 10-year yield is trending lower. Mortgage rates have a tendency to move in the same direction as the 10-year yield, so rates are improving to start the week.
Rate/Float Recommendation
Lock in a rate soon
With mortgage rates moving a little lower to begin the week, right now is a great time to lock in a rate on a purchase or refinance. If you end up waiting a few weeks or months to lock, you run the risk of getting a significantly higher rate.
Learn what you can do to get the best interest rate possible.
Today’s economic data:
Fedspeak
- St. Louis Fed President James Bullard made some interesting comments this morning during an interview, stating that reviewing the current inflation target of 2% is a “good thing to do and I am hopeful the committee will go ahead and do it.”
Chicago Fed National Activity Index
- The Chicago Fed National Activity Index hit 0.12 in January. That puts the 3-month moving average at 0.17.
New Home Sales
- New Home Sales for January hit an annualized rate of 593,000. That’s down from the prior reading of 625,000.
Dallas Fed Mfg Survey
- 10:30am
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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
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from Total Mortgage Blog http://ift.tt/2GL5BnC
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