Mortgage Rates Unchanged Following Speeches

Mortgage rates were unchanged today. Markets waited all week for Janet Yellen’s speech this morning on thoughts she may have what some were calling her most important speech ever on monetary policy and details on current Fed thinking about tapering the balance sheet at the Sept meeting - and possibly a rate increase at the December meeting.

Wasted worry as it turned out - she focused on regulations and defending them as recently there has been a buzz about reducing bank regs. Nothing special about her speech. The takeaway is a dovish speech that did hold rates lower but not by much. Regardless of what Wall Street money managers and hedge funds echo, the Fed appears overall to be concerned about the current economic outlook and levels of stocks. There are of course those at the Fed that want an increase but the boss seems less enthusiastic.

European Central Bank President Mario Draghi said this afternoon the global recovery is improving, but like an increasing number of financial and business leaders, warned about demographic challenges to growth. The euro spiked 1 percent above $1.1930 to its highest against the U.S. dollar since Jan. 2015 after Draghi's remarks.

On to the debt ceiling that will dominate and waste ink all next month; the debt ceiling will be increased but in the meantime, expect Democrats to try flexing some muscle on tax reform as leverage for cooperation on the debt ceiling. You know what I think - this bi-annual debt stuff gets old after years of it. The US will not default on its debt – period!  Anything else in the debates and arguments is wasted concerns.

Next week is employment week. Going to a busy week for data that depending on how the data is revealed could increase market volatility in stocks and interests. Still holding minor bullish technical reads but as has been the case recently nothing of consequence in the mortgage or bond markets. I may stay with the market and reverse my thoughts to again “cautiously float” and watch the market actions/reactions – but anything less than 15 days and lock.

In summary, most of my clients continue to favor locking.   I am not opposed to floating, but you must have a good handle on what you are watching to make the grab at a good rate.  Rely on your Loan Officer to provide you those answers.