Mortgage Rate Update February 18, 2016

Posted on by Evan in Rate Update, Swanson Home Loans Blog - Mortgage Rate Updates and More

Mortgage rates are unchanged from Monday.  Mortgage rates remain slightly worse as compared to last Wednesday-Thursday.

US stocks started the day higher but have since stalled, which bodes well for interest rates.  Worries over slowing global growth have re-emerged which drives capital into perceived “safe-havens” including the US debt markets and drives our yields lower.

Is the US economy on the brink of an economic slowdown?  The Philadelphia Fed released its monthly barometer for manufacturing and it remained in negative territory which signals continued contraction for manufacturing.  Bad news for the economy tends to be good news for mortgage rates.

Continuous weakness in the manufacturing sector has some investors worried.
Continuous weakness in the manufacturing sector has some investors worried.

Tomorrow we’ll get the latest reading on the Consumer Price Index (CPI).  Inflationary pressure remains weak in our economy (exception: housing costs in Portland, OR) and we’ll see if that trend continues. If so, that fact coupled with fears over an economic slowdown will put the Fed on hold in hiking short-term interest rates.  The next Fed monetary policy meeting is scheduled for March 15th-16th and the markets think there is a 94% chance the Fed will not hike.

From a technical perspective there is reason to believe that mortgage rates can regain the .125% they lost late last week so I am going to recommend cautiously floating.

Current Outlook: floating