Mortgage Rates Open the Week Flat

Mortgage rates are steady as we saw the stock indexes a little better this morning and the 10-year Treasury note below 2.80% at 2.79%.  Trade is still the overriding concern in markets.

Where Are Mortgage Rates Going?                     

>>> Rates steady as we start a new week

President Trump did another Sunday tweet. Last Sunday’s tweet added angst when the tweeted that he was ready to add $100B more to his trade tariffs on China, which led to the DJIA drop the next day by 458 points on the tweet. Yesterday his tweet has been seen as a plus for markets, indexes this morning had the DJIA up 165 points in pre-opening trade. Trump yesterday he and President Xi will always be friends no matter what happens with our dispute on trade. 

There are no economic reports today.  This week markets get PPI and CPI and Treasury will sell a total of $64B of 3-year, 10-year, and 30-year Treasury notes.  There is no change in markets’ focuses, as trade will continue to move markets in the current very uncertain outlook (volatility). Trade re-dos are likely but re-negotiating trade deals is going to take much longer than some investors are presently thinking - at least a year and likely more like two years of back and forth negotiations. In a sense China does have a leg up on the US, Chinese officials will be very patient having less concern on how any of it will affect its citizens. Here, we are not patient and politicians usually want immediate results. China will put their citizens and economy on the line with the attitude that in the long run it will achieve whatever its perceived goals are.

Markets heading into earnings season now, as they have seen earnings robust over the last two quarters.  If they remain solid it will add a little to the underlying economic positive outlooks and add some balance to the trade fears now dominating US and global markets. Inflation which is a key focus for longer dated rates will get another look tomorrow and Wednesday when PPI and CPI data is reported, both are expected to be moderate but inching higher.

Rate/Float Recommendation           

>>> Lock now while rates are low

Mortgage rates are starting off flat this week, which is good news for anyone looking to buy a home or refinance their current mortgage. While trade is the issue now and are mostly impacting short term rates, it also will filter to longer term rates like mortgages. With the economy improving and the tax cuts adding further stimulus this year, the Federal Reserve has made it clear that its decade-long policy of extraordinary accommodation is over.

Rates are on track to move higher as the year unfolds so most borrowers will be better off locking in a rate soon. Remember you can always give us a call or visit our website at Call The Money Man.