Mortgage rates are priced slightly better this morning.
In yesterday’s monetary policy statement elected to keep the term “extended period” in it’s description of how long they intend on keeping short-term interest rates low. The markets have interpreted this to mean that the economic recovery will take time and inflationary pressure will remain subdued in the near-term. Bad news for the economy is often good news for mortgage rates so rates are slightly better this morning.
The Fed’s stance on inflation was supported by this morning’s Producer Price Index (PPI) report which is an indicator of price pressure at the wholesale level of our economy. The report showed that price pressure is contained which is a good sign for mortgage rates.
We’ll have to see if price pressure at the retail level of our economy also remained in check last month when the Consumer Price Index (CPI) is reported tomorrow. For now we remain in a locking position as 30 year fixed rates remain below the 5.00% level (5.01% APR).
Current outlook: locking bias