Mortgage Rates Unchanged Today

Mortgage rates were basically unchanged today – especially in light of the data that came out this morning slightly stronger inflation data.  Bond markets moved lower in price and higher in yield - a classic reaction to that type of data. 

Federal Reserve Chairwoman Janet Yellen, not convinced that recent soft economic data portends a lasting slowdown, said she expected the central bank to raise rates this year, followed by gradual moves thereafter. Weak consumer and business spending, combined with sputtering factory output, have raised doubts in many investors’ minds that the Fed will be able to hike rates this year. Economists have pushed back their expectations of the first hike in about nine years to September, and markets are not pricing in any hike until the end of the year.  Yellen said that although the outlook remains uncertain, “the U.S. economy seems well positioned for continued growth.”

The bigger question is whether or not it means anything about a bigger push back against the recent rise in rates.  There is no easy answer here.  Indeed, the last 3 weeks of trading is reminiscent of that which precedes some of the biggest historical moves.  The problem is that some of them take rates much higher, while others take them much lower.  The takeaway is that risk is extremely high and so is reward when it comes to locking and floating.  Anyone interested in pursuing that reward should be well aware of the risks and prepared to accept a higher rate if markets move against them.

In summary, Fridays before holiday weekends are notorious for bond markets and mortgage pricing retreats, and today was no exception. Rates are slightly up from yesterday, but there was very little change on what was quoted today versus yesterday.  All I can say is enjoy the weekend - have a great Memorial Day Holiday – as for now my focus is on this weekend’s barbeque.