Inflation continues to be nowhere in sight

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Published Date 5/14/2019

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 far today. The MBS market improved by +9 bps yesterday. This probably wasn't enough to improve rates or fees. Rates experienced moderate to high volatility yesterday.

Today's Rate Forecast: Neutral

Genco Olive Oil: Import Prices are NOT showing any inflation as a result of tariffs or any other reason as YOY Import Prices netted out a negative 0.2% vs est of a gain of 1.0%. This anti-inflationary data is generally good for bonds.

Small Business Optimism: The April NFIB Index jumped to 103.5 vs est of 102.4. Earnings expectations saw a significant increase.

Fed: We will hear from Kansas City Fed President Esther George at 12:45.

Trade War: President Trump says that he will meet with Chinese President Xi at the G20 meeting. He also tweeted that he expects a very successful deal in three or four weeks.

Germany: CPI YOY 2.0% vs est of 2.0%/Wholesale Prices YOY 2.1% vs est of 1.5%.

Great Britain: Unemployment Rate 3.8% vs est of 3.9%.

Eurozone: Industrial Production -0.6% vs est of -0.8%.

Today's Potential Rate Volatility: Average

Yesterday the rate markets saw a good deal of volatility, but in the end, closed relatively unchanged. Inflation data today came in weak which is positive for rates. Look for continued sideways movement 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

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.

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