Three things that could impact rates this week

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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 moving sideways today. The MBS market improved by +8 bps last week. This was not enough to decrease 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) Inflation, 2) Jobs and 3) Manufacturing.

1) Inflation: After Powell said on Friday that the Fed would not move their target rate from 2% and that they would keep pressing until inflation actually hit that goal, this week's inflation related data will be very important. On Thursday we will get the Fed's key measure of inflation, Core PCE. It is expected to increase YOY from 4.1% to 4.2% which of course is still double their target rate.

2) Jobs: We get Big Jobs Friday this week ahead of the long holiday weekend. Throughout the week we have a ton of job and wage related data points including: JOLTS, ADP, Initial Weekly Jobless Claims, Challenger Job Cuts, Non Farm Payrolls, Unemployment Rate, Average Hourly Earnings and more.

3) Manufacturing: We get some very big name manufacturing reports this week with both Chicago PMI and ISM Manufacturing PMI. We will focus on the internals for employment and prices paid.

Treasury Auctions: Here is this week's Treasury auction schedule:

08/28 2 YEAR and 5 YEAR Notes

08/29 7 YEAR note

This week's Potential Rate Volatility: High

This morning markets are treading water. Volatility has started low but expect it to skyrocket if any of our key reports this week miss expectations.

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.

All loans are subject to credit approval. Interest rates are subject to change daily and without notice. Current interest rates shown our indicative of market conditions and individual qualifications and will vary upon your lock-in period, occupancy, loan type, credit score, purpose and loan to value and lending source. Income and mortgage proctection producst are subject to client's suitability and affordability (DOI Lic# 4334805). 

Jonathan Caguioa

Mortgage Advisor

NMLS: 250609 / DRE 01137630

Allianze Mortgage Services

15820 Whittier Blvd. Suite G, Whittier CA 90603

Company NMLS: 346138 / DRE 01403147

Office: 949-241-2527

Cell: 949-241-2527

Email: lenderguide@allianzemortgage.com

Web: https://mortgage2000.org/