Mortgage Rate Update April 4, 2011

Mortgage rates are basically unchanged this morning.

After focusing on international events over the past couple weeks interest rate participants are now scrutinizing the Fed for clues about future monetary policy.  In the most recent couple weeks various Fed officials have voiced diverging views about whether or not it is too soon for the Fed to “tighten” monetary policy now that the economy appears to be on more stable ground.

Why is this important for mortgage rates?  If you’ll recall, the Fed is currently implementing their “QE2” stimulus plan which is designed to keep long-term interest rates low in order to encourage economic growth.  Fed Chairman Ben Bernanke is scheduled to speak later today and tomorrow the Fed is scheduled to release minutes from their last meeting.  Both events will draw the market’s attention.

Looking ahead for the week, the economic calendar is fairly light.  From a technical perspective mortgage rates have benefited from technical support.  However, it’s only a matter of time before they reverse higher.

Current outlook: locking bias