Mortgage Rate Update April 5, 2011

Mortgage rates are priced worse this morning.

Interest rates are struggling to find direction.  Since the beginning of the year 30 year fixed rates have remained within a range of 4.75%-5.00%.

 

As I’ve stated repeatedly here on ‘rate update’ mortgage rates are likely to finish the year higher than they are today.  So what will be the catalyst that will push rates higher?  I believe it will be inflation & economic growth but the timing is tougher to predict.

In a speech given yesterday afternoon Fed Chairman Ben Bernanke downplayed recent inflationary pressure for food & energy.  However, other Central Banks around the globe are reacting by tightening monetary policy.  China raised its benchmark lending rate yesterday and the European Central Bank is widely expected to raise short-term rates on Thursday.

Later today we’ll get to see meeting minutes from the Fed’s last monetary policy meeting.  There could be some interesting tidbits because there appears to be a growing divide amongst Fed officials about the timing of rate hikes.

Current outlook: neutral