Mortgage Rates Moving Sideways Today

Mortgage rates are moving sideways so far today. Today economists were expecting GDP higher than what was reported (1.9%), but after being the first look, it will likely be revised next month when the preliminary report is released. The GDP price deflator (inflation) was in line with estimates.

December durable goods were expected to have increased but was reported with a decrease. Core capital goods orders (nondefense ex-aircraft) showed significant strength in November, but on trend have not been strong in December.

Initial reactions to the data were choppy but within narrow ranges. Prior to the open and afterwards, we have seen very little change in the indexes.  The same goes for the 10yr and MBSs, with very little movement from yesterdays close.

The final data today came out with the U. of Michigan January consumer sentiment index, came out better than anticipated and the best level since January 2004.

UK Prime Minister Theresa May will meet with Pres. Trump today. Yesterday she warned an end to previous PM Tony Blair’s “doctrine of liberal interventionism” (1999), in prior times the US and UK moved into countries to engage nation building. She warned that the US and UK had to resist the “eclipse of the west” by China, India and Russia. “We — our two countries together — have a joint responsibility to lead,” she said. “Because when others step up as we step back, it is bad for America, for Britain and the world.” May dismissed the “failed policies of the past” and declared that the US and UK should no longer “intervene in sovereign countries to remake them in our own image”.

Economic data today was a mixed bag. Nothing too positive or negative to push mortgage rates out of a fairly tight channel. The wild card is the meeting with Trump and May. If it looks like things are going well, we could see a bit of a push higher in mortgage rates. The opposite is also true, if it looks like talks deteriorate then mortgage rates could push lower.