We will maintain our locking bias

A robust job market combined with strong consumer spending and widespread construction spending led to a hotter than anticipated final reading for 2nd quarter GDP. It was reported this morning that the US Economy expanded at a rate of 3.9% between the months of April through June of 2015. This was an increase from the previously reported 3.7%. This reading comes on the heels of a first quarter where GDP grew at only a 0.6% rate, which was largely blamed on poor weather during the harsh winter months.  It is expected that the US Economy will end the year with an annual growth rate in the 2.9% range.  Global headwinds combined with slowing exports have likely slowed the growth pattern in the third quarter and is expected to continue throughout the fourth quarter as well.

The Federal Reserve anticipates that lower gas prices and a tight labor market will help the world’s largest economy continue to expand in spite of slower worldwide economic growth. In fact, Fed Chair Janet Yellen reiterated yesterday her belief that rates will be increased before the end of 2015. Most are placing their bets on a December increase. However, Janet has not ruled out a mid-meeting surprise rate hike that could happen in-between normally scheduled Fed Committee Meetings. Such actions are rare and typically occur when data supports the need for an immediate move. Although that is unlikely at this point, it could be a tactic deployed if markets become too frustrated over the Fed’s reluctance to make a move.

Mortgage bonds had another failed attempt to break above their 200 day moving average yesterday and were pushed down as a result.  This shows that bonds aren’t yet strong enough to rally higher.  Therefore, we will maintain our locking bias.

Get your custom rate quote in 30 seconds

See your customized rate and fee options without sharing any personal information

See Purchase Rates See Refi Rates

Additional Articles

Still Need Help?