Mortgage Rate Update October 30, 2014

Pricing on mortgage rates is slightly worse compared to Monday.

The economic influences that impact mortgage rates are sending somewhat mixed signals.

Yesterday, the Fed released its latest assessment of the economy after concluding their regularly scheduled monetary policy meeting.  As expected, the Fed formally announced an ending to quantitative easing (QE) which has been in place for 6 years.  Their statement is being interpreted as slightly more “hawkish” than previous versions.  This means that the Fed may be signaling that they intend on raising short-term interest rates sooner than expected (Spring 2015?).

Earlier today the Bureau of Economic Analysis released its first reporting on third quarter Gross Domestic Product.  The release showed that the US economy grew by 3.5% during the third quarter of this year.  This was higher than expected.  Normally good news for the economy is bad news for mortgage rates.

 

In a separate report it was reported that prices rose by only 1.2% year-over-year according to the US Personal Consumption Expenditure price index.  This report is supposedly the Fed’s favorite gauge in tracking inflationary pressure.  Low inflation is good for mortgage rates.

For now we can float but will need to keep a close eye on the market.

Current Outlook: cautiously floating