Rate Update March 29, 2010
Mortgage rates are priced slightly better compared to Friday morning.
This morning the Commerce Department released the monthly Personal Income & Spending report. Embedded in this report is the Fed’s favorite gauge of inflation known as the Personal Consumption Expenditures price index (PCE). The report showed that inflation pressures remain weak which is a positive for mortgage rates.
Looking ahead for the week it is a fairly busy schedule that concludes with the jobs report on Friday. The interesting factor in this months release is that it falls on Good Friday when the markets will be closed. I anticipate we may see rates move higher as the week goes on in anticipation of this release.
The end of March marks the end of the Fed’s subsidy of mortgage rates. The Fed has invested $1.25 trillion in mortgage-backed securities since the end of 2008 which has helped keep mortgage rates at historically low levels. I don’t believe rates will immediately move higher but they will with time and I don’t believe there is a catalyst for them to move lower.
Current outlook: locking bias