Mortgage Rate Update August 18, 2016

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

Mortgage rates are unchanged from Monday.

Yesterday minutes from the last Fed meeting were released.  They indicated that a some on the monetary policy committee believes the timing is ripe for another rate hike.  These “hawks” cite a strong labor market and steady economic growth.

Fed "hawks" are pushing Fed "doves" to hike rates again soon.
Fed “hawks” are pushing Fed “doves” to hike rates again soon.

However, the “doves”, those on the committee who are not ready to hike (including Janet Yellen), would like to see more inflationary pressure before they hike.  Market odds believe there is a 50% chance the Fed will hike at one of the next three meetings (September, October, and December).

The remainder of this week’s economic calendar is quiet.  As I wrote about on Monday (see HERE) the technical picture for mortgage-backed bonds (MBS) remains potentially volatile.  For now MBS prices are trading in our favor but that could change quickly so caution is advised.

I am going to switch to a floating position for now.

Current Outlook: floating