The markets are tuning in today to hear from the current chair of the Federal Reserve, Jerome Powell. He’s up on Capitol Hill before the House as part of a semi-annual testimony.
The top dog at the nation’s central bank certainly has the power to sway the markets one way or another, but it’s unlikely he’ll say anything today that will cause a major swing. Read on for more details.
Market Outlook 2.26.18 from Total Mortgage on Vimeo.
Where are mortgage rates going?
Rates flat today as Fed Chair Powell heads to Capitol Hill
The focus for financial market participants today is part one of Fed Chair Jerome Powell’s testimony on Capitol Hill. Momentarily, he will go before the House Financial Services Committee to answer questions from lawmakers about various happenings at the nation’s central bank.
We already got the written statement from Powell earlier this morning, which basically repeated what we already knew about inflation and rate hikes from the FOMC minutes last week.
Given the current economic situation and that this is Powell’s first trip to D.C. as Fed Chair, the general consensus is that he’ll take a diplomatic approach.
Analysts expect him to brush off recent market volatility and reaffirm the Fed’s cautious approach to gradually raising the nation’s benchmark interest rate–the federal funds rate.
[tmslink name = “rates”]
If we take 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 at 2.86% right now.
That’s pretty much flat on the week but it is down a bit from last week’s high of 2.95%. With mortgage rates typically moving in the same direction as the 10-year yield, we’re seeing rates similarly flat on the week and a little lower from last week’s highs.
Of course, we could certainly see bond yields and mortgage rates adjust today once Powell is finished speaking. It seems that a likely scenario here is that Powell talks up the U.S. economy, bolstering the belief in investors that the Fed will move forward with at least three rate hikes in 2018.
In turn, this would have the effect of pushing up stocks, Treasury yields, and mortgage rates. We’re not talking about a massive push higher today, but it’s conceivable that we finish a couple basis points above where we are right now.
| [contentbox id=”10″] |
Rate/Float Recommendation
Lock in a rate soon
Mortgage rates kicked off 2018 by rising over forty basis points in the first two months (according to the Freddie Mac Primary Mortgage Market Survey). We saw that steep climb temper somewhat last week, and right now we’re on track to remain flat this week.
This pause is not expected to last for any significant amount of time; however, as many analysts are still calling for the 30-year fixed rate to hit 5% at some point in 2018.
Learn what you can do to get the best interest rate possible.
Seeing how we’re more than fifty basis points away from that mark right now, it makes sense for most borrowers to lock in a rate on a purchase or refinance soon. The longer you wait, the greater the chance of you locking in a much higher rate.
Today’s economic data:
Durable Goods Orders
Here are the numbers for January:
- New Orders fall 3.7% month over month, putting them at 6.8% year over year.
- New Orders Ex-Transportation fell 0.3% month over month, making it 6.9% year over year.
- Core capital goods fell 0.2% month over month, bringing it to 6.3% year over year.
International Trade in Goods
The nation’s trade deficit widened to $74.4 billion in January.
Jerome Powell Testimony
- Currently underway is part 1 of the Fed Chair’s trip to Capitol Hill this week.
FHFA House Price Index
The FHFA House Price Index crept up 0.3% in December. That brings it to 6.5% year over year.
Consumer Confidence
Consumer confidence hit 130.8 in February. That’s up from the prior reading of 125.4 and is higher than the consensus for 126.4.
Richmond Fed Manufacturing Index
The Richmond Fed Mfg Index spiked in February up to 28–the second highest reading on record.
[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/2oz7NXS
No comments:
Post a Comment