Rate Update October 1, 2010
Mortgage rates are unchanged this morning.
It’s a busy morning for economic news. Earlier in the day it looked as if mortgage rates would be pressured higher on economic data that was in line or better than analysts were expecting (good news is good for stocks but bad for rates).
Specifically, the Commerce Department reported earlier that personal incomes grew by more than expected in August and consumption spending was in line with expectations.
However, after this positive news was posted the Institute for Supply Management (ISM) reported that two important gauges (new purchases and employment) in the overall manufacturing index were weaker than expected. This news is helping rates to stabilize.
Probably the most important news of the morning is that a Fed official explicitly confirmed that the Fed is “likely” to step in and offer further quantitative easing in the last 3 months of the year. As I blogged about HERE the markets have been expecting an announcement which is partially why mortgage rates dipped over the past couple weeks. Attention now will be placed on the size and timing of the package.
Mortgage-backed bonds are trading up against technical support. So long as support holds I’ll recommend a floating position.
Current outlook: floating
Posted: October 1st, 2010 under Rate Update.
Tags: oct 1 2010 MBS, oct 1 2010 mortgage rates, oct 1 2010 outlook for rates