Rate Update December 14, 2009
Mortgage rates are mostly unchanged from Friday after increasing by about .25% during last week.
There is not any substantial economic news scheduled for today but we will see a healthy dose of economic data over the next two days. Tomorrow brings the Producer Price Index report (PPI) and on Wednesday we’ll see the Consumer Price Index (CPI) and the Fed’s post-policy statement. The Fed is widely expected to leave rates unchanged.
From a technical standpoint mortgage-backed bonds have stabilized at the 200-day moving average. If prices can hold we may see an improvement at some point. However, if momentum drags prices below this level we may be in for another .25% increase to rates.
As the year winds down there are fewer and fewer market participants which means we are likely to see rates remain in a narrow range. We are shifting to a neutral position.
Current outlook: neutral