Mortgage Rates Waiting for Speeches Today at Jackson Hole

Early this morning, the stock indexes were better, the 10yr. note unchanged from yesterday and MBS prices also essentially unchanged. But since then, we have movement in a favorable direction before any talks begin in Jackson Hole.

Today is about the speeches by Janet Yellen and Mario Draghi at the Jackson Hole symposium. Comments and how markets interpret them will dominate trading later this morning and this afternoon. No inflation, what comments will come from both central bankers. The Fed’s expected decision to begin tapering on its balance sheet at the September meeting (19th and 20th).  Also, there remains the prospects of another increase in the Federal Funds rate at the December meeting. A rate increase in December is completely dependent on the economy and inflation outlook between now and then, and that is likely what Yellen will say if she says anything about it at all. Many thinking her speech on financial stability could be a historic speech - not sure why it is seen that way, but according to most news wires, that is how it has been framed.

Mario Draghi is expected to be leaning more toward reducing its continuing QEs and increasing its base lending rate. Draghi will not speak until later this afternoon. He may have news, but he is not able to make the decisions without an ECB meeting next month.

Ahead of this weekend confab, there have been a lot of opinions, and markets have been anticipating it for a month now. It is a key annual meeting, and in the past, there have a few times central bankers have begun changes and announced them at Jackson Hole.

Then there is the debt ceiling - the press all over it today. A government shutdown and the US defaulting on our debt without increasing the debt limits gets a lot of focus every other year. The US has never defaulted on debt payments - the implications too dangerous to markets, the US debt markets and the US economy.

Hurricane Harvey moving closer to land as Gasoline refineries directly in the path. 35% of gasoline is refined in the path that will push gasoline prices higher. Depends on what occurs.  Forecasts being adjusted every hour as the storm approaches.

Durable Goods number came out with a mix bag.  This is considered a preliminary read on orders that will be finalized when we get July factory orders in a couple of weeks. No reaction, but generally weaker than thought - it is a very volatile series.

As I finish this report, Janet Yellen's speech was right in line with what markets were expecting. Draghi's speech comes this afternoon, and could move mortgage rates if anything surprising comes out.