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 under a little pressure today. The MBS market improved by +14 bps last week. This was not enough to decrease mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: NEUTRAL
Here are the three things that have the greatest ability to impact rates this week, 1) Inflation, 2) The Fed and 3) Geopolitical

1) Inflation: We will get the Fed's official key measure of inflation, Core PCE on Friday. Estimates call for the YOY Core reading to rise from 2.8% to 3.0%.

2) The Fed: We will get the Minutes from the last FOMC Meeting on Wednesday and we will hear from plenty of feds all week.

3) Geopolitical: The bond market is reflecting a higher potential for escalation with US/Iran. We also may get a decision out of the Supreme Court by Friday on Tariffs.

This Week's Potential Volatility: HIGH
This morning markets have started out under pressure. Volatility has started low but could escalate to high depending on any surprises with PCE or geopolitical movements.

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.