Mortgage Rates Holding… For Now

Mortgage Rates Holding… For Now

Yesterday’s Congressional testimony by Fed President Jerome Powell did little to scare the bond market.  Much of his testimony restated key points that have been said multiple times. This is good news for the near term direction of mortgage interest rates, which have a history of volatility surrounding statements made by the Fed Chairman.  Most concerning, Powell seemed to imply that given the current low level of interest rates, the Fed is not in a position to fight off a near-term recession.  Of course the Fed would love to raise rates in order to have more power when it is needed.  However, it seems the US economy isn’t currently strong enough to support this.  This seems to be in direct opposition of what everyone seems to be saying about the supposed “strength” in the current economy.  It certainly makes you wonder who is right and who is living with belief of an assumed state of strength or weakness that isn’t really true…

 

Mortgage bonds continue to hold their ground in the face of an insanely strong stock market (which is again expected to jump to new all time high record levels at the opening of the market).  At some point, the stock market’s strength could have an adverse impact on the bond market, pressuring mortgage interest rates higher.  For now, let’s take advantage of the rate opportunities available.  With mortgage interest rates so close to record lows, it is not a time to take the risk of waiting in hopes of rates falling lower In the near-term.

 

We will maintain a locking bias.