Mortgage Rate Update July 13, 2011

Posted on by Evan in Rate Update

Mortgage rates are worse this morning.

The interest rate markets have reversed slightly higher this morning in response to stocks trading higher.  In early morning trading the Dow Jones Industrial Average was up 150 points.

Investors have turned temporarily optimistic on better-than-expected economic output numbers from China & speculation about a 3rd round of quantitative easing.  Given China’s growing role as a global economic leader this morning’s positive data is being received as a possible engine to jump start the domestic economy.

In congressional testimony Fed Chairman Ben Bernanke told lawmakers that the Fed was ready to act (again) with stimulus if needed.  Personally, I’m not sure what more the Fed can do but nevertheless stock investors are biting on his soundbite.

Let’s not forget that the fiscal condition of multiple EU members is continuing to worsen.  This very well could be the catalyst for mortgage rates to move lower.  Later today the Treasury will auction $21 billion of 10-year notes.

Current Outlook:  neutral