Mortgage Rate Update March 13, 2012

Mortgage rates are priced slightly worse .

A better than expected retail sales report is boosting stocks and hurting interest rates this morning.  The report showed that sales at the retail level of our economy grew by 1.1% in February.  Furthermore, previously released figures for January were also revised higher.

Also contributing to optimism this morning is a report out of Germany showing that economic expectations have risen to the highest level since the beginning of the Greek debt crisis.

Mortgage rates will have to contend with $21 billion in new 10-year notes set to be auction by the US Treasury today.  Also ahead if the Fed’s monetary policy statement due out in a couple hours.  Despite the gradual improvement in economic data as of late, including job creation, some analysts believe the Fed will announce another round of monetary stimulus designed to keep interest rates low.  If you’ll recall, the current program called “Operation Twist” is set to expire on June 30th.  If the Fed hints at another program today I expect rates to benefit.  Conversely, should they indicate that another round of stimulus is NOT in the works it could be a catalyst for rates to increase.

Current Outlook: neutral