Mortgage Rates Choppy Today

Mortgage rates were kind of choppy today, as what was dictated the same in the financial markets. This morning the 10yr traded down to 2.41% and stock indexes hugged the flat line. Stocks began to find footing around my morning report when it came out, but MBSs sort of took a dive to safety as anticipation seemed to spark concern over the Fed minutes that were about to come out.

When they did, we saw that the minutes did imply that the Fed will increase rates “fairly soon”.  Some of the members voiced a possibility of a move next month at the next meeting (March 14 & 15). “The committee might need to raise the federal-funds rate more quickly than most participants currently anticipated to limit the buildup of inflationary pressures,” the minutes said. Fed officials also see “heightened uncertainty” from the Trump administration’s plans for tax cuts and spending increases, the minutes show. Still, officials said they “would likely have ample time to respond” if fiscal policy pushed inflation higher than anticipated. Some officials were concerned that markets did not believe policy makers in December when they penciled in three quarter-percentage-point rate increases for 2017.  Not really anything new from what we already knew from the meeting. The FOMC also increased the blackout prior to the meeting to the second Saturday prior to the meeting; in the case for next month means no Fed speakers from Saturday the 4th to after the meeting. This was great news as there are too many mouths from this group, and everyone has an opinion that really does not mean anything on an individual basis.

The Treasury sold $34B of 5yr notes this afternoon, and as anticipated, was a soft auction and disappointing after the strong auctions of 2yrs yesterday. Not much else was shaking.

In summary, markets have been overwhelmingly volatile, and continue to pose a major dilemma for all borrowers who are not protected.  It is too speculative to determine if rates may improve in an economic environment that is clearly supporting stronger growth in income, jobs, economic expansion and deregulation.  Locking in at application is the only way to ensure your success.  Take the risk off the table and lock in.