Mortgage Rate Update December 14, 2015

Mortgage rates are more or less unchanged from last week.

The big economic news story of the week is actually no news at all.  The Fed will meet tomorrow and Wednesday and make a monetary policy statement at the conclusion of the meeting.  There is a very high probability that the Fed will raise short-term interest rates by .25% on Wednesday.  This will not be a surprise as the markets are expecting it.

Looking at this decision in a broad context it makes perfect sense.  During the last recession the US economy lost 8.7 million jobs.  We’ve since added 13 million jobs.  Although inflation and wages have only accelerated modestly over this time period they are starting to increase at a more aggressive clip.

Speaking of inflation, tomorrow we’ll get the latest reading on the Consumer Price Index (CPI) which is expected to reach 2.0% on the core reading for the first time in 19 months.  The rest of the economic calendar is relatively light.

From a technical perspective interest rates are trading between support and resistance.  For now we can begin the week by floating.

Current Outlook: floating