Mortgage Rates Lowered Following Mix Economic Data
Mortgage rates fell today following a
reading on 1st Quarter GDP that was much weaker than expected. Downbeat
economic data tends to benefit bond prices, including the Mortgage Backed Securities
(MBS) that most directly influence rates. When prices rise, rates fall. The
good times kept rolling in the afternoon when the Fed Announcement arrived
essentially unchanged from the previous version. The most prevalently quoted
conforming 30yr fixed rate for best-case scenarios now is closer to 4.375% than ever, but 4.5% is still the
best play.
Today was an important one to get through for mortgage rates as we work our way toward Friday's even more important data. The fact that the Fed didn't change much in their policy statement is not a surprise, but it is somewhat of a surprise to see just how little markets reacted to it. Most of the day's activity was concentrated on the morning data, which only adds weight to Friday's Employment Situation Report.
More key data tomorrow as we get Weekly Jobless Claims, March Personal Spending, and the April National ISM Manufacturing Index. Also, The US Treasury said it will begin this quarter to trim the size of the 2 and 3yr note auctions as a shrinking budget deficit gives the government scope to reduce borrowing.
In summary, the Fed decision did not consist of any surprises. QE will be reduced by another 10 billion per month. With the Lack of pre-pays and the slowdown in originations I do not see these impacting rates too much. GDP was very weak and this helped the bond market today. All eyes are now on Fridays Job Report. Should you lock or float? Are you a gambler or do you want to take the safe bet? Pigs Get Fat and Hogs Get Slaughtered!
Today was an important one to get through for mortgage rates as we work our way toward Friday's even more important data. The fact that the Fed didn't change much in their policy statement is not a surprise, but it is somewhat of a surprise to see just how little markets reacted to it. Most of the day's activity was concentrated on the morning data, which only adds weight to Friday's Employment Situation Report.
More key data tomorrow as we get Weekly Jobless Claims, March Personal Spending, and the April National ISM Manufacturing Index. Also, The US Treasury said it will begin this quarter to trim the size of the 2 and 3yr note auctions as a shrinking budget deficit gives the government scope to reduce borrowing.
In summary, the Fed decision did not consist of any surprises. QE will be reduced by another 10 billion per month. With the Lack of pre-pays and the slowdown in originations I do not see these impacting rates too much. GDP was very weak and this helped the bond market today. All eyes are now on Fridays Job Report. Should you lock or float? Are you a gambler or do you want to take the safe bet? Pigs Get Fat and Hogs Get Slaughtered!
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