Rate Lock Advisory

Monday, August 11th

Monday’s bond market has opened modestly higher as traders prepare for this week’s highly important economic data. Stocks are also relatively calm with the Dow up 28 points and the Nasdaq up 15 points. The bond market is currently up 2/32 (4.27%), which should keep this morning’s mortgage rates close to Friday’s early pricing.

2/32

Bonds

30 yr - 4.27%

28

Dow

44,204

15

NASDAQ

21,465

Mortgage Rate Trend

Trailing 90 Days - National Average

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

Indexes Affecting Rate Lock

Medium

Positive

Fed Talk

There is no relevant economic data coming today. This morning’s movement in bonds appears to be a result of this weekend’s speech by Fed Vice Chair Bowman, who indicated she felt recent data calls for the Fed to make three rate cuts over the year’s remaining three FOMC meetings. This is one more than what current forecasts show. If you recall, she was one of the two dissenting votes to keep rates unchanged at last month’s FOMC meeting.

High

Unknown

Consumer Price Index (CPI)

July's Consumer Price Index (CPI) is the first of this week’s five relevant economic reports. The 8:30 AM ET release tomorrow morning is expected to show consumer inflation rose last month. Analysts have the overall CPI up 0.2% for the month while the more important core data that excludes volatile food and energy prices rose 0.3%. Both are expected to be up from June’s level on a year-over-year basis. Good news for mortgage rates would be weaker than predicted readings. This would also all but guarantee a Fed rate cut next month. However, stronger inflation readings would put the Fed in a more difficult position after July’s Employment report earlier this month showed the other half of their dual mandate (maximum employment) was much softer than thought.

High

Unknown

Producer Price Index (PPI)

The remainder of the week brings us the release of four more monthly economic reports, including two that are also labeled highly important to the markets. We also have a handful of Fed-member speeches sprinkled throughout the week that could draw reactions in the bond market.

High

Unknown

Inflation News

Overall, tomorrow is the most important day for mortgage rates due to the significance consumer inflation data carries in the markets. The calmest day may be Wednesday with no data scheduled, as long as none of the Fed speeches that day yield any surprises. We should see noticeable movement in the bond market and mortgage pricing this week, so it would be prudent to proceed cautiously if still floating an interest rate and closing in the near future.

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... Lock if my closing was taking place between 21 and 60 days... Lock 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.

RTC Mortgage Corporation

1000 N. Coast Highway, #7
Laguna Beach, CA 92651
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NMLS: 288939 BRE: 01117142



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