Ryan's Rate Commentary

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I'm among few mortgage professionals who have access to live trading screens during market hours.

Rates Currently Trending: NEUTRAL
Mortgage rates are moving sideways today. The MBS market improved by +37 bps last week. This was enough to decrease mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: NEUTRAL
Three Things: These are the three areas that have the greatest ability to impact rates. 1) Tariffs, 2) Inflation and 3) Jobs.

1) Tariffs: The main driving force for rates this month is still here and can still cause a lot of volatility.

2) Inflation: The Fed's key measure of inflation, Core PCE will hit on Wednesday. The bond market will be very sensitive to this reading. If its high, its very negative for rates. If it is lower than expected, it could give the Fed cover to cut rates.

3) Jobs: It will be Big Jobs Friday and starting on Tuesday will get a daily barrage of job and wage related data each day culminating in the BLS release on Friday with Non Farm payrolls, Unemployment Rate, Average Hourly Earnings and more.

Central Banks: We will get the Bank of Japan's interest rate decision on Thursday.

This Week's Potential Volatility: HIGH
This morning markets saw some rocky trading that has left us sideways for now. Volatility has started high with potential for high volatility all week

Bottom Line:
If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.