Mortgage Rates Sideways Today

Mortgage rates are moving sideways today after we had a nice bounce yesterday, albeit even if it was only a small one.  The biggest disappointment so far is that the 10yr note has it the new resistant level and is not breaking through as it did in the past.  Currently at 11:00AM, we have the 10yr at 1.75% after opening at 1.77%.  MBSs are is negative territory, but not by much.

This is the biggest piece of economic data this week came out today in relationship to September Retail Sales and PPI. There was some mixed results, but the PPI on YOY basis was three times higher than expected and a large increase from August's YOY reading of 0.0%. But the number that gets the most attention is the Core PPI (less food and energy) on YOY basis which matched forecasts of 1.2% and is well below the Fed's 2.0% threshold. Business Inventories: The August reading matched market expectations. 

Consumer Sentiment was lighter than expected. Also, we got the mid-month U. of Michigan consumer sentiment index lower than anticipated which will add support to the bond and mortgage markets but not much.  Last, August business inventories increased a bit over what was anticipated.

Eric Rosengren, Boston Fed President one of the 3 to vote for an immediate rate hike in September is calling bluntly for a rate hike in December. Said on CNBC this morning that there is a "much higher probability" of a rate hike at the December FOMC and that pricing in such a hike is "appropriate." He is concerned that the labor market is too tight and cited the risk of overshooting the unemployment rate which he sees falling 1/2 point to 4.5% over the next 15 months. He also said low long rates are creating "anomalies" in the commercial real estate market which he warned is running hot.

Mortgage rates are on hold until 12:30 PM EST today. At that point, we could see some volatility depending on Janet Yellen's remarks.  The overall trend is toward higher rates, so she'll have to say something fairly dramatic to get mortgage rates to move significantly lower.

Best bet is to hold onto your seats if you are a risk taker, but in my opinion, the best bet is to lock these great rates now.