Rate Update August 11, 2010
Mortgage rates are better this morning.
Stocks have opened the day sharply lower which is helping interest rates to move lower. The move comes on the heels of the weak economic data and the Fed policy statement yesterday.
The Commerce Department reported this morning that the trade deficit (the difference between the amount of goods imported into the US and the amount of goods exported out of the US) widened by a larger than expected margin. This is bad news for the economy which is why investors are selling stocks this morning.
Also helping rates to move lower was the Fed’s announcement yesterday that they would use money from the prepayment of mortgage-backed bonds (MBS’s) on their balance sheet to buy more US Treasuries which will create additional demand and drive yields down.
Current outlook: floating