Rate Update May 11, 2010
Mortgage rates are unchanged.
What a difference a day makes. Yesterday the markets were enthusiastic following the EU’s nearly $1 trillion bailout announcement. Traders thought that all would be fine and I shifted my outlook to ‘locking’ thinking that the “flight-to-quality” trade would unwind.
Today there are renewed fears that the EU’s bailout plan will not be enough to stave off the fiscal crisis from spreading AND over the long-term implications this package has on creating a moral hazard for other EU countries to overspend. The renewed fears are helping mortgage rates in the US to remain low.
Later today the US Treasury will auction $38 billion in 3-year notes. I expect demand for the auction to be strong but if it is not we could see rates move higher. Attention remains focused on Greece.
Current outlook: neutral
Posted: May 11th, 2010 under Rate Update.
Tags: may 11 2010 lock or float my rate?, may 11 2010 MBS, may 11 2010 mortgage rate report, may 11 2010 mortgage rates, may 11 2010 outlook for rates, may 11 2010 rate update