Mortgage Rate Update June 15, 2015

Mortgage rates are unchanged from last Monday.

The financial travails in Greece are back in the headlines this morning.  Over the weekend talks between Greece and its creditors broke down.  Greece is supposed to pay the International Monetary Fund a 1.6 billion euro payment by the end of June.  There is growing speculation that they will not meet that obligation which could throw Greece’s financial system into chaos.  The fear is that contagion will spread to other European Union countries such as Portugal, Italy, and Spain.  That fear contributes to a “flight-to-quality” that helps US interest rates.

Greece's financial system may crumble next....
Greece’s financial system may crumble next….

International markets are helping US interest rates remain low but the domestic picture is less certain.  We know that the recent employment numbers have been fairly robust and that wages are rising in the US.  Assuming this trend continues the Fed will need to raise short-term interest rates in order to curb inflationary pressure.  That said, there is growing skepticism regarding the outlook for the economy.

This morning’s report on manufacturing and capacity utilization showed continued weakness in the manufacturing sector of the economy.  This is likely a consequence of a stronger US dollar and lower exports.

Later this week we’ll get the Fed’s latest monetary policy statement (Wednesday).  The Fed is not expected to raise short term interest rates this week but they may provide clarity on when they intend on starting that exercise.  On Thursday we’ll get the Consumer Price Index from the Labor Department which will reveal whether inflationary pressure is growing.

We’ll begin the week by floating to see if there is any follow through regarding the Greece storyline.

Current Outlook: floating

The views and opinions expressed in this site are those of the author(s) and do not necessarily reflect the official policy or position of Cherry Creek Mortgage Co., Inc. This is for informational purposes only. This is not a commitment to lend.