Mortgage Rate Update April 9, 2012

Mortgage rates are better today.

With the stock market closed on Friday US equities have opened sharply lower in response to Friday’s disappointing jobs report.  When stocks trade lower it typically helps mortgage rates move lower.

Mortgage rates have recovered about .25% from the spike in rates suffered after the Fed’s last monetary policy statement.  Will they continue to move lower and achieve all-time low levels again?

It’s not out of the realm of possibility.  If US economic data turns sour over the next couple weeks then it will increase the likelihood that the Fed will respond with further monetary stimulus when Operation Twist ends in June.  Furthermore, Portugal & Spain are creating renewed awareness over the vulnerability of Europe’s financial system.

Mortgage rates will have to contend with new debt supply from the US Treasury.  They are slated to auction $66 billion in notes beginning with $32 billion in 3-year notes tomorrow.  The meat of the economic calendar doesn’t kick off until Wednesday when we get a look at export/ import prices and the Fed’s beige book.

Current Outlook: floating