Welcome back if you were away for spring break! Mortgage rates worsened slightly last week but remain very attractive.
US stocks ended last week slightly lower. This follows five weeks of strong gains. As I wrote about on Thursday (see HERE) I think the stock market looks vulnerable which could lead to lower mortgage rates.
Contributing to losses in the stock market last week were comments made by Fed officials. Federal Reserve Bank of Atlanta President Dennis Lockhart said in a speech that a rate hike could take place as soon as the April meeting, which is scheduled for April 26th-27th. In a separate speech Federal Reserve Bank of Richmond President Jeffrey Lacker said he was confident inflation would continue to increase to the Fed’s target of 2%. Prior to these comments the markets had thought the next Fed hike would not be until later in 2016 if at all. Fed Chairwoman Janet Yellen is scheduled to deliver a speech tomorrow so analysts will be listening closely to her comments for additional clues.
The economic calendar is jam packed with significant economic data this week. The highlight will be Friday’s all-important jobs report. The markets are expecting ~200,000 new jobs created for the month of March. Another strong report would likely push rates higher and vice versa.
Earlier today the Fed’s favorite gauge of inflation was released. The Core Personal Consumption Expenditures Price Index (Core PCE) was up 1.7% year-over-year which is unchanged from last month and still below the Fed’s target.
I am going to maintain a cautious floating bias.
Current Outlook: cautiously floating