Rate Update September 22, 2009
Mortgage rates are mostly unchanged from yesterday despite a sell-off in mortgage-backed bonds in the afternoon.
The major story today is the Fed’s record auction of 2-year notes. The Fed will sell $43 billion of them later this morning. The additional supply of fixed income securities will compete with mortgage-backed bonds for investment dollars. Should demand for bonds be strong we’d expect mortgage rates to remain low and vice-versa.
Threatening the demand for bonds today is that fact that Japan is celebrating a national holiday.
The Fed begins a two-day meeting on monetary policy today. Tomorrow they are expected to leave short-term interest rates unchanged. What we’ll be listening for are any comments relating to the Fed’s TALF program and whether or not they will use the remaining $200 billion to purchases mortgage-backed securities or not. If they indicate that they will not this would almost certainly cause rates to rise.
Current outlook: locking bias
Posted: September 22nd, 2009 under Rate Update.
Tags: direction of mortgage rates sept. 22, mortgage rates sept. 22, sept. 22 mortgage rate outlook, sept. 22 outlook for mortgage rates, should I lock or float?, which way will rates go today setp.22
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