Little Move On Today's Mortgage Rates 3-14-2017

By James Brooks

The bond market is down 4/32 (2.62%) we should see a slight increase in today's mortgage rates by .125 of a discount point.

Today?s only relevant economic data was February's Producer Price Index (PPI) at 8:30 AM ET. It showed a 0.3% rise in both the overall and core data readings. Analysts were expecting to see a 0.1% rise in the overall reading and a 0.2% increase in the core data. This means that inflationary pressures at the manufacturing level were stronger than thought. By theory, that is bad news for bonds and mortgage rates. Fortunately, traders appear to be shrugging off the news.

Tomorrow is the key day of the week. It should bring plenty of volatility in the markets and mortgage rates. It starts with two very important pieces of economic data at 8:30 AM ET. February's Retail Sales data from the Commerce Department is one. This data is extremely important to the financial markets because it measures consumer spending strength. Since consumer spending makes up over two-thirds of the U.S. economy, data that is related usually has a big impact on the markets. This month's report is expected to show a rise in sales of 0.1%. If it reveals a larger increase, the bond market will likely fall and mortgage rates will move higher as it would indicate a stronger level of economic growth than many had thought. If it shows a much weaker level of spending, I expect to see bond prices rise and mortgage rates improve tomorrow morning, assuming the second release doesn?t show a significant surprise.

The second release of the morning will be February's Consumer Price Index (CPI). It is the sister release to today's PPI but measures inflationary pressures at the very important consumer level of the economy. The CPI is expected to show a 0.1% increase in the overall index and a 0.2% rise in the more important core data. As with the PPI, weaker than expected readings would be good news for bonds and mortgage rates.

Tomorrow also has several Fed events scheduled. They start with the 2:00 PM ET adjournment of the two-day FOMC meeting that began today. There is much debate whether or not Fed Chairman Yellen and company will raise key short-term interest rates at this meeting. There is a very good chance that they will make another quarter point bump and I am one that believes it happen Wednesday. Even if no move is made, we will be closely watching the post-meeting statement for changes in verbiage that could indicate when their next move is likely to take place. If they don?t act at this meeting, it is widely expected that it will come at the next. So, if the post-meeting statement hints that it may not happen at the next meeting either, we can expect a very favorable reaction in the bond market.

The FOMC meeting will adjourn at 2:00 PM ET, which is when the statement will be released. That is also when we will get the Fed?s updated economic projections. Those events will be followed by a press conference by Chair Yellen. It is likely going to be a pretty active morning tomorrow but an even more active afternoon in the financial and mortgage markets.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Lock if my closing was taking place over 60 days from now.

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