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 getting support today. The MBS market worsened by -10 bps last week. This was not enough to increase 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 this week. 1) Central Banks, 2) Geopolitical and 3) Treasury Auction.

1) Central Banks: We will get key interest rate decisions from the People's Bank of China and the European Central Bank.

2) Geopolitical: The constant swirl of Trump versus Powell will continue to dominate the headlines as will any trade/tariff's as the August 1st deadline is fast approaching.

3) Domestic News: We have an important 20Y Treasury Bond auction on Wednesday.

The Fed: We will hear from Fed Chair Powell on Tuesday but he is not supposed to be speaking about future policy this close to the July meeting. The Atlanta Fed Business Inflation expectations will get a lot attention on Wednesday.

This Week's Potential Volatility: HIGH
This morning markets have seen some significant support. Volatility has started at high levels and may remain that way due to geopolitical drama.

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.