Mortgage Rates Not Moving

Mortgage Rates ended the month with about as much fanfare as it went in – basically unchanged and trading in the very tight range that has only been upset by a few days last week.  Over 45 days we have seen this sort of “absence” in the volatility that greatly decreases the need to stress out about locking or floating your rate, but as always, the question is whether or not that will continue to be the case.

Still wondering what Vice Chair of the Fed Stanley Fischer said the other day about zero and negative rates working well. The water in Jackson Hole must have been spiked. They do not work, at least so far.  Has not worked in Europe and Japan, even though it has in some smaller economies somewhat but overall negative rates should be seen in a simple way without all of the fluff and economists’ twisting. Zero and negative rates have only one purpose, push investors will large accounts into equity markets but also sucking in the small investor that will eventually have their heads handed to them. It is a handful of life jackets for those on the promenade decks while the millions in the lower decks get nothing. 

Tomorrow weekly jobless claims will be out at 7:30AM.  The more important data - Q2 productivity and unit labor cost revisions, along with the August ISM manufacturing index.  A big day for data and 24 hours from the September employment data.

In summary, rates were flat as traders prepared for Friday's August's NFP report.  We are locked in one of the tightest ranges I can remember, which makes it easier for secondary desks to price aggressively. The bigger question is when will it break – and in which direction will it go? It would not surprise me if markets shrug off NFP, but in the event they do not, I do not recommend floating and miss out on our current phenomenal pricing.