Mortgage Rate Update June 23, 2011

Mortgage rates are better this morning.

Stocks are starting the day sharply lower, which is helping to push rates lower, on weaker than expected jobs data and a mix of public comments from various finance officials.

Weekly jobless claims increased last week and the 4-week moving average remained at 426,250 signaling that the jobs market remains weak.

Yesterday afternoon the Fed concluded their 2-day monetary policy meeting.  In the post-meeting statement & press conference the Fed made it clear that the economic recovery is moving slower than they previously expected and warned that it remain weak into 2012.

And what would be a morning ‘rate update’ if I didn’t have something to report about Greece.  Greek officials are still trying to close a €3.5 billion budget gap as they weigh demands of their creditors against the growing anger of their constituents.  If they are unable to enact austerity measures then it would likely cause Greece to default driving demand for “safe” US fixed income securities and pushing rates lower.  An EU finance official warned overnight about the spill-over effects of a Greek default so the markets are jittery.

Current Outlook:  floating