Mortgage Rate Update September 15, 2014

Mortgage rates are higher across the board compared to a week ago.  The question now is will rates continue to trend higher?  Or will be see them cycle back down.

The economic calendar is packed this week.  Of note, we’ll get readings for the Producer Price Index, Consumer Price Index, housing starts, building permits, and the latest Fed meeting.  Overseas, Scotland will vote on a referendum to separate from the UK (a “yes” vote would likely cause rates to improve here in the US).

The Fed will deliver its latest monetary policy statement on Wednesday

.  If you’ll recall it was a letter released last week by the San Francisco Fed which helped push rates higher (see HERE).  Any indication that the Fed may move to increase short-term rates on a more aggressive timetable could keep mortgage rates on an upward path.  Conversely, if the Fed attempts to “accommodate” the markets it would likely help rates reverse lower.

From a technical standpoint US interest rates appear poised for improvement.  In 8 of the past 11 trading days the yield on the US 10-year treasury note has worsened.  Whenever we see acute movement in the marketplace its not uncommon for trends to reverse.

We will continue to float with the hope that technical signals hold.

Current Outlook: carefully floating