Rate Update Aaron’s 30th birthday, 2010
Mortgage rates priced slightly better this morning. Happy 30th birthday to Aaron! (you may send him birthday greetings at firstname.lastname@example.org)
The Labor Department released another tame read on inflation this morning. The Consumer Price Index, which measures price pressure at the retail level of our economy, increased 2.2% from a year ago. Low inflation is good for mortgage rates and also means the Fed is likely to keep short-term interest rates low for the near-term.
The German government unilaterally changed their trading rules on the German markets overnight. The surprise move is designed to prevent speculators from targeting German bank stocks and Greek credit default swaps. The move is significant because it shows a lack of coordination between EU countries which will spook investors. This could lead to more demand for US debt and lower rates.
From a technical standpoint mortgage rates have improved for 4 straight days and mortgage rates are at the low end of their range. We start to get nervous at this stage so will warn folks that the safe money will lock.
Current outlook: neutral