Mortgage rates are more or less unchanged from the latter half of last week.
Diminishing expectations for a 3rd round of quantitative easing caused mortgage rates to increase by approximately .25% over the first 3 weeks of August. However, after the minutes from the most recent Fed monetary policy meeting were released last week the markets did an about turn and now it seems as though QE3 may be on the table again. Consequently mortgage rates improved by .125%.
Fed Chairman Ben Bernanke is scheduled to speak this Friday in Jackson Hole, Wyoming at the annual conference for central bankers.
It is widely expected that he’ll settle the debate then.
In the meantime, the economic calendar is fairly full this week with data out on housing, gross domestic product, personal income, and inflation.
In Europe, German & French officials are scheduled to meet with leadership from Greece. Greece is requesting additional time to hit deficit targets which are a condition of further bailout funds. All in all the status quo continues- a lot of talk and not much concrete action.
I expect interest rates to remain at current levels until Friday when they’ll take direction from Chairman Bernanke’s speech.
Current Outlook: neutral