Manufacturing data continues to worsen as Initial Weekly Jobless claims drop

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Published Date 3/28/2024

Today's Mortgage Rate Summary

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up.

Rates Currently Trending: Neutral

Mortgage rates are under pressure today. The MBS market improved by +11 bps yesterday. This was not enough to decrease mortgage rates or fees. The market experienced low volatility yesterday.

Today's Rate Forecast: Neutral

Housing: The February Pending Home Sales Index edged out estimates, up 1.6% versus estimates of 1.5%.

Jobs: The Initial Weekly Jobless Claims continues to defy logic with only 210K. The four week moving average dropped to 211K. Continuing Claims were 1.819M.

GDP: We got our third look at the 4th QTR GDP and it was revised higher from the last revision of 3.2% to 3.4%. The increase in the fourth quarter primarily reflected increases in consumer spending and state and local government spending.

Manufacturing: The March bellwether Chicago PMI cratered down to 41.4 versus estimates of 46.0. This is a very contractionary reading and further evidence of our long term manufacturing recession.

Consumer Sentiment: The final March reading was revised from 76.5 to 79.4.

The Fed: Fed Governor Waller said he expects the number of rate cuts to be lower than 3 or even pushed out until next year.

Today's Potential Rate Volatility: Neutral

This morning markets are under mild pressure. Volatility wil be moderate today.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Source: TBWS

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