Three things that could impact rates this week

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Published Date 9/23/2024

Today's Mortgage Rate Summary

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.

Rates Currently Trending: Neutral

Mortgage rates are under pressure today. The MBS market worsened by -5 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) Inflation, 2) The Fed and 3) The Consumer.

1) Inflation: We will get the Fed's preferred measure of inflation on Friday with the Core PCE which is expected to rise by 0.2% on a MOM basis and to move from 2.6% to 2.7% on a YOY basis.

2) The Fed: Now that Fed week is in the rearview mirror, the bond market is focused on the next move and will give a lot of weight to this week's speakers:

09/23 Bostic, Goolsbee, Kashkari

09/26 Powell, Collins, Williams

3) The Consumer: We will get two key report cards on the state of the consumer this week. The August Consumer Confidence surprised to the upside, the September reading is expected to remain elevated. On Friday we will get the final reading on the UofM Consumer Sentiment Index.

Treasury Auction: Here is this week's Treasury auction schedule.

09/24 2 year notes.

09/25 5 year notes.

09/26 7 year notes.

This week's Potential Rate Volatility: High

This morning markets have started under pressure. Volatility has started at moderate to high levels and 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.

Source: TBWS

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

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