Mortgage Rates Flat

Mortgage rates tried to move higher today, but there was a slight resilience in underlying bond markets.

Tax cut hearings began in the Senate Finance Committee today. Nothing but the usual barbs between Republicans and Democrats, but at least it is a beginning. Republicans ramping up the rhetoric, no tax cuts for the wealthy but Dems say there are large tax loop holes that do favor the rich. In the House today they passed a $1.2 trillion bill to fund most government activities in the fiscal year beginning Oct. 1, knowing the Senate will disagree with many controversial elements and force a negotiation that could stretch into December. More politics in action.  

The funding bill passed on largely party lines getting one Democrat vote (211-198). By the time the tax cut bill gets to the White House it will not look anything like the bill today. Democrats warned that the bill, which bundled together 12 separate funding measures would need substantial revision in the Senate, where Republicans hold 52 of 100 seats but most legislation requires 60 votes for passage.

Oil experts are now venturing that demand for oil will continue to increase and with OPEC and Non-OPEC producers expected to continue with their cuts well in and past the March deadline prices will increase. Today WTI oil momentarily breached $50.00 the pivot that draws attention. If that outlook materializes it would be another reason for the Fed to ponder a rate hike in December.

Tomorrow some key data reports will be forthcoming and could set the tone for the weekend.  Right now, proceed with caution if you are still floating.

In summary, bond markets were open today, but it was tough to tell as prices were virtually flat.  This morning's "warm" inflation data failed to motivate sellers to the extent it typically would have.  Glad the losses have slowed, but not sure we are poised for gains either.  Floating is a 50/50 call here, depends on how well you like to roll dice.