Three things that could impact rates this week


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 getting some minor support today. The MBS market worsened by -34 bps last week. This may have been enough to increase mortgage rates or fees. The market experienced high volatility last week.

This week's Rate Forecast: Neutral

Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) Central Banks, 2) Inflation and 3) GDP.

1) Central Banks: We get key interest rate decisions and policy statements out of the Bank of Japan, the European Central Bank and the Bank of Canada. None of the Central Banks are expected to change their rates during this round of meetings, the markets will be focused on any guidance as to when the BofJ will raise rates and the ECB will cut rates.

2) Inflation: We will get the Fed's preferred measure of inflation (Core PCE) on Friday along with Personal Incomes and Spending. The market is expecting the MOM pace to increase from the prior month. The hotter this reading is, the worse it is for bonds and vice versa.

3) GDP: We get our nation's economic report card for the 4th QTR. (aka GDP) It is expected to drop from 4.9% in the 3rd QTR to 2.0% in the 4th.

Treasury Auction: We have a week of shorter term notes with the 2, 5 and 7 YR note auctions.

This week's Potential Rate Volatility: High

This morning markets are getting a small boost without any economic data. Volatility has started at moderate levels but will likely spike with PCE and 4th quarter GDP later in the week.

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

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

Paramount Residential Mortgage Group
Corporate NMLS ID:  75243
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Brian Voytko

Mortgage Advisor

NMLS: #437292

The Mortgage Whiz

Company NMLS: 338923

Cell: 215-407-3832




Brian Voytko


Mortgage Advisor

NMLS: #437292

Cell: 215-407-3832

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