Mortgage rates are basically unchanged from the beginning of the week.
With regard to interest rates nothing major to report thus far in the week. The media continues to speculate that the Fed will raise short-term interest rates in June but I don’t expect they will unless the June 3rd jobs report is very strong.
One interesting item to watch is the difference between shorter duration interest rates and longer-term rates. Below is a chart showing that the yield on the US 2-year treasury and 10-year treasury notes have been converging (the spread is tightening).
Traditionally this has been an early indicator of an upcoming economic slowdown. This signal is not 100% accurate but it is something to keep an eye on. Keep in mind that bad news for the economy tends to be good news for mortgage rates.
I don’t see a catalyst for mortgage rates to worsen so I am going to recommend floating over the weekend.
Current Outlook: neutral