Three things that could impact rates this week

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Published Date 9/19/2022

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: Higher

Mortgage rates are moving higher today. The MBS market worsened by -104 bps last week. This was enough to increase mortgage rates or fees. The market experienced high volatility last week.

This week's Rate Forecast: Higher

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

1) The Fed: Long-awaited FOMC meeting is this week and on Wednesday we will get a lot out of the Fed including:

An Interest Rate Hike in the 50BPS to 100BPS range with most of the market pricing in a 75BPS hike.
The release of their Economic Projections (which is used to create the much maligned Dot Plot Chart) which will communicate the Fed's expected path of inflation, growth and rates.
A live presser with Fed Chair Powell.

2) Central Banks: We get key interest rate decisions out of the Bank of Japan, Bank of England, Swiss National Bank and the Risksbank (Sweden).

3) Treasury Sales: We have an important 20 year Treasury bond auction on Tuesday.

This week's Potential Rate Volatility: High

This morning markets are already under pressure. Volatility is always high around FOMC.

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.

Wymac Capital, Inc.

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