Rate Update January 6, 2010
Mortgage rates are unchanged from yesterday. This morning treasuries and mortgage-backed bonds (MBS’s) are taking a breather after a 2-day rally that helped rates move modestly lower.
Yesterday afternoon Rueters confirmed news that I reported in Tuesday’s ‘rate update’ concerning the Fed’s consideration of extending the TALF program which is credited with keeping mortgage rates low throughout 2009. Currently the program is set to expire in March but the Fed is apparently weighing the idea of extending the program to support the fragile housing market. Any more positive developments around this topic would likely cause rates to improve.
The next two days will present the most significant economic news of the week. Tomorrow the US Treasury will announce the treasury auction schedule for next week. More supply than anticipated would put upward pressure on rates and vice versa. On Friday is the all-import jobs report. Analysts are currently expecting the jobs report to show 10,000 jobs created in December which would be the first month of job growth in two years. We’ll discuss this more in tomorrow’s rate update.
Current outlook: locking bias