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 a little support today. The MBS market worsened by -3 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
These are the three things that have the greatest potential to impact rates this week. 1) The Fed, 2) Central Banks and 3) Retail Sales.

1) The Fed: We have the Federal Open market Committee meeting on Wednesday with an expected rate cut of 25BPS. But the key will be the release of their Economic Projections (dot plot chart). Will this show one or two more cuts for 2025?

2) Central Banks: Our Fed is not the only game in town this week as we have important Interest Decisions and Policy Statements out of the Bank of Canada, Bank of England and the Bank of Japan.

3) Retail Sales: The biggest data point of the week will be Tuesday's Retail Sales. We saw a big jump in Consumer Credit last week, will that translate to more spending?

Treasury Auction: We have an important 20 year Treasury bond auction on Tuesday.

This Week's Potential Volatility: HIGH
This morning markets saw a litle bit of support but we are already trading near the top of our channel. Volatility has started at moderate levels but will increase later in the 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.