Mortgage rates are unchanged thus far this morning. We remain cautious as the technical trading patterns in the bond market suggest we may see rates move higher in the coming days.
The market digested two economic reports this morning which showed inflationary pressure in the economy remains low. First, the Labor Department reported that prices at the wholesale & manufacturing level of the economy (Producer Price Index) increased by a lower than expected pace in October. Second, The Federal Reserve reported that Industrial Production and Capacity Utilization were in line with expectations in October. These measures suggest that the economy has much more capacity to expand without placing price pressures on manufacturers.
Ordinarily tame inflation data would help mortgage rates move lower. However, we’ve seen mortgage rates improve over the past couple weeks and it looks as though the rally may be losing steam. We are going to maintain our locking position.
Current outlook: locking