Mortgage Rates Unchanged

Mortgage rate were unchanged today.  A Lazy Friday to end the first quarter of the year - not much movement and that goes along with the rest of the week, but we are ending the week on a day of price improvements. Interest rates, both treasuries and mortgages, unchanged this week. Stock indexes better but not much. There were little data to chew on until today.  

Friday next week is the March employment data. Monday March ISM manufacturing index, Feb construction spending; New York Federal Reserve Bank President William Dudley will conduct a press briefing on household borrowing, student debt trends and the impact of student debt and educational attainment on homeownership, followed by Q&A. Tuesday March auto and truck sales, February factory orders with final durable goods data. Wednesday, ADP March private jobs (ADP has been reporting big job increases this year, larger than BLS estimates), March ISM services sector index, minutes from the FMC meeting in March when the FF rate was increased. Thursday, weekly jobless claims. Friday, March employment data and the final Feb wholesale inventories.  

Been an increase in talk this week at the Fed about looking more seriously at the Fed’s $4trillion balance sheet ($800B in 2007) - nothing that sticks but discussions are occurring; New York Fed President Dudley (FOMC voter) said that the Fed could pause hiking rates while winding down its balance sheet.  Minneapolis Fed President Kashkari (FOMC voter) said that there is interest among some FOMC members to shrink the Fed's portfolio in a gradual way. Why should we care? Not sure because any reduction in the balance sheet is another way to push interest rates higher. Dudley said the Fed is not in a huge rush to tighten policy since the economy is not overheating. Bullard echoed the sentiment, as did Kashkari.

In summary, the 10yr is still trading in the range that I have commented on the past few days Late afternoon buying sent the 10yr to 2.39 and MBSs at a positive 29BPS.  I really did not see that coming but was happy to see it.  Unless we see some news next week, Jobs Report Week is always unsettling for myself.  Hang on tight if you still feel like floating but do not get caught if it goes up.