Mortgage News Blog

On Tuesday this week, the Federal Open Market Committee (FOMC) will be holding their first meeting and will adjourned on Wednesday at 2:15ET. At that time, Bernanke and Company (FOMC) will release their first meeting results which will be scrutinized word for word by the traders. The traders will be looking for to see if  and when the FOMC will raise the Fed Rate as well as the Fed’s take on economy, inflation and the Quantitative Easing program. How this is worded and how the traders interpret the words could affect mortgage interest rates.

Though this week is a busy one for economic reports only a few can and might move the market. But remember, other global news can spook the market.

Tuesday besides the FOMC meeting, we will get the Consumer Confidence Index. This is moderate to high importance report. It indicates how confident the consumer is in their own financial situation, whether they will be making any big ticket item purchases, and the economy as a whole.

Friday will see four economic reports being released but the most important one will be the Gross Domestic Product for the 4th Quarter of 2010. This is important as it tells us if the economy has been recovering and growing. A weaker report will be good for the bond market and therefore mortgage interest rates. A good report which is stronger than the expected 3.8% growth will have the exact opposite effect on the bond market and therefore mortgage interest rates.  

The other report on Friday that can affect mortgage interest rates will be the 4th Quarter Employment Cost Index. That measures employers cost of employees’ wages and benefits. A good report can indicate inflation which is bad for the bond market.

And on top of these important reports, the Treasury will be auctioning off 5-year and 7-year Treasury Notes respectively on Wednesday and Thursday. If these are well received then we can see a raise in mortgage interest rates in the afternoon on both days. If not, then lower interest rates.

In this week’s MMG Weekly Reportis an article on the new “driving” rules set forth by the IRS as well as more indepth information about last week and the economic reports that will be released this week.

As always, please feel free to contact me with your questions or concerns whether it be about your particular mortgage financial situation or more information about how the bond market affects mortgage interest rates.

To an inspired day and week,

Betsy Moore
Mortgage Advisor
MLO# 118165
206-331-2749