Rate Update June 28, 2010

Mortgage rates are better this morning.

The G-20 meeting in Toronto concluded yesterday with the world’s richest countries committing to cutting their deficits.  In the long run this is good for interest rates.  In the near-term analysts are interpreting this commitment to mean governments will cut spending which increases the likelihood of a “double-dip” recession.

On this news investors are further exhausting the “flight-to-quality” trade that has carried rates lower over the previous couple months.

It will be a fairly busy week in terms of economic data.  On Friday the all-important jobs report for June will be released.

Current outlook: neutral