Rate Update July 21, 2010

Mortgage rates are unchanged today.

With a lack of significant economic data out today attention is focused on Capitol Hill & Wall Street.

Fed Chairman Ben Bernanke is scheduled to testify in front of Congress later today and tomorrow.  With the economic outlook still bleak investors are listening to hear if the Fed has any plans to apply further stimulus.  With short-term interest rates already near 0% there’s not much more they can do.  Should the chairman provide any glimmer of optimism we may see rates move higher.

Stocks are trading sideways today along with mortgage-backed bonds (MBS’s).  Wells Fargo reported better than expected earnings earlier today which is helping the financial sector but technology stocks are lower in response to weaker revenue from Yahoo.

All in all it looks like another sideways day for mortgage rates.  On Friday, the European Central Bank is scheduled to release the results of their “bank stress test”.  If the test is credible and shows that European banks remain strong this could pressure rates higher and vice versa.

Current outlook: neutral