Rate Lock Advisory

Wednesday, October 29th

Wednesday’s bond market has opened in negative territory again as traders await this afternoon’s Fed news. Stocks are continuing to set record highs with the Dow up 249 points and the Nasdaq up 135 points. The bond market is currently down 4/32 (3.99%), but more afternoon strength again yesterday should allow this morning’s mortgage rates to be slightly lower than Tuesday’s early pricing.

4/32

Bonds

30 yr - 3.99%

249

Dow

47,955

135

NASDAQ

23,963

Mortgage Rate Trend

Trailing 90 Days - National Average

  • 30 Year Fixed
  • 15 Year Fixed
  • 5/1 ARM

Indexes Affecting Rate Lock

Low

Negative

Treasury Auctions (5,7,10,20,30 year)

Yesterday’s 7-year Treasury Note auction didn’t draw the same level of interest as Monday’s 5-year Note sale. The benchmarks pointed to a soft or below-average demand compared to other recent sales. We did see afternoon strength in bonds yesterday, but it came long after the results were posted at 1:00 PM ET. While the auction results didn’t have a negative impact on rates, they didn’t lead to the afternoon improvement either. In other words, the auction was a non-event for mortgage rates.

High

Unknown

Federal Open Market Committee (FOMC) Statement

Today’s big news comes this afternoon when the FOMC meeting adjourns at 2:00 PM ET. It is expected to bring another quarter-point cut to key short-term interest rates to help support a softening employment sector. There isn’t much debate about what Chairman Powell and his colleagues are going to do today despite inflation still well above the Fed’s preferred 2.0% annual rate. However, there is some disagreement amongst analysts about what may happen at December’s meeting. This means that an announcement of a .250 percent rate cut today shouldn’t have a big impact on the markets. What bond traders are more interested in is what is likely to happen going forward.

High

Unknown

Misc Fed

This week’s FOMC meeting will adjourn at 2:00 PM ET today, as will the release of their post-meeting statement. The press conference with Chairman Powell will start at 2:30 PM ET. This meeting does not include revised economic projections or their dot plot of key rate predictions. Whether or not we see volatility this afternoon depends on that the markets take from their statement and the press conference. Confirmation of another rate cut in December should, by theory, be good news for bonds and mortgage rates since it would signal the Fed isn’t overly concerned about inflation rising. Bad news for rates would be an indication that they may wait and see how inflation reacts to the last two reductions before making another move.

---

Unknown

none

There isn’t much coming tomorrow that we need to be concerned about. What is happening will be addressed in this afternoon’s updated report that will be posted shortly after the markets have an opportunity to react to the FOMC events.

Float / Lock Recommendation

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Edward P. Mortimer Jr

MLO # 112693 | Broker License # 110065

7109 114th Ave SE
Newcastle, WA 98056
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