Mortgage Rate Update August 18, 2011

Mortgage rates are back down at all-time lows this morning.

Mortgage rates are reacting to a global sell-off in equity markets.  Concerns over the health of the global economy have pushed all of the major stock market indexes lower by over 4% this morning which is helping to push rates lower.

In light of the renewed concern over weakness in the economic recovery analysts are increasingly talking about a third round of quantitative easing.  Although many critics debate the effectiveness of this monetary policy tool we do know that it helps to keep rates low.

There was a long list of economic data released this morning.  Weak retail sales in the UK and a very low read on economic activity in the Philadelphia Fed region were amongst the highlights.  Inflation at the retail level of the economy was reported in line with expectations.

I will shift my outlook to a floating position.

Current Outlook:  floating