Rates Flat As Signs Of Inflation Remain Low

January 14, 2020

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 so far today.  The MBS market worsened by -8 bps yesterday. This caused rates or fees to mostly move sideways for the day. The rates experienced moderate volatility yesterday.

TODAY’S RATE FORECAST: NEUTRAL

Small Business Optimism: The December NFIB Index was positive with a reading above 100 (102.7), but it was a smidge lower than market expectations of 103.1

Inflation: The December Consumer Price Index (CPI) YOY headline reading matched market expectations with a gain of 2.3%, which was an increase over November’s YOY pace of 2.1%. The Core (Ex-food and energy) YOY reading also matched expectations of 2.3%.

The Fed: Today, we’ll hear from John Williams and Esther George.

Trade War: The U.S. Treasury Department has removed China from the status of currency manipulators in preparation for the Phase 1 deal.

TODAY’S POTENTIAL RATE VOLATILITY: AVERAGE

Rates are moving sideways today on low volatility. Today’s CPI report was in line with estimates, and the trade deal/signing is moving along as expected. Look for rates to continue in the tight channel on low to moderate volatility.

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

Related Post

View all >