06 Mar Stocks Climb Higher
Stocks ended the day strong yesterday, and are building on their gains again so far today. The resilience in the stock market continues to be a testament to the strength in the U.S. economy. Consumers, employers and investors are all showing a strong level of confidence in the future. As long as this trend continues, it will provide a headwind for mortgage interest rates. The key things to watch when considering the longer term direction of mortgage interest rates will be consumer inflation levels and GDP. Although President Trump believes GDP can grow without pressing consumer prices higher, that theory has not yet been proven. I believe investors will continue to demand higher returns as GDP climbs higher. This will naturally drive mortgage interest rates higher.
Concerns over the tariffs on imported steel and aluminum are diming today, as markets seem to be less concerned over the prospect of a trade war developing between the U.S. and other nations. Trump has found little support from his own party over trade issues. Without much support on either side of the isle, this could become less of a global trade concern. In fact, there is already talk about negotiating exemptions with Mexico and Canada. Others may follow as well.
There remains very little to get excited about in the mortgage market. We will maintain our locking bias.