Daily Rate Lock Advisory

Indexes Affecting Rate Lock

Medium

Positive

Treasury Auctions (5,7,10,20,30 year)

Yesterday’s 20-year Treasury Bond auction followed suit of last week’s two long-term security sales by drawing a decent demand from investors. The benchmarks pointed to an above average demand compared to other recent sales. There was some movement in bonds yesterday afternoon that led to a couple of major lenders issuing an intraday improvement in rates and other raising them slightly. However, they don’t seem to be a direct response to the auction results that were posted at 1:00 PM ET. The moves began well before the results announcement, meaning the auction didn’t have a noticeable influence on rates.

High

Positive

Retail Sales

This morning’s big economic news was the release of May's Retail Sales report at 8:30 AM ET that showed consumers spent less than many analysts had thought. The 0.9% decline in overall sales was weaker than forecasts of a 0.6% decline. If more volatile and costly auto transactions are excluded, sales fell 0.3%. Analysts were expecting to see a 0.1% increase in this reading. Furthermore, both readings for April were revised lower than previously estimated. Today’s report shows consumers spent less last month than they did in April. This is very good news for the bond market and mortgage rates because slowing consumer spending restricts broader economic growth.

Medium

Positive

Industrial Production

Also released this morning was May's Industrial Production data. The 9:15 AM ET release revealed output at U.S. factories, mines and utilities slipped 0.2% last month. Forecasts had the report showing a slight increase in production. This means parts of the manufacturing sector were weaker than predicted, making the data good news for bonds and mortgage pricing.

Low

Unknown

Housing Starts (New Home Construction)

Tomorrow brings us the release of a minor economic report in the morning and an afternoon of highly important Fed events. May's Housing Starts report will begin the day’s activities at 8:30 AM ET. It tells us the number of new home groundbreakings. This is not considered to be as important as other housing reports and usually has a minimal impact on mortgage rates. Market analysts are expecting to see a small decline in new home construction starts last month. Good news for the bond market and mortgage rates would be a noticeable decline in groundbreakings.

High

Unknown

Federal Open Market Committee (FOMC) Statement

The afternoon events start at 2:00 PM ET when this week's FOMC meeting adjourns. This meeting also includes revised economic projections from the Fed and a post-meeting press conference with Fed Chairman Powell. There is a strong consensus that the Fed will leave key short-term interest rates unchanged at this meeting. They have previously stated they will be taking a wait and see approach towards key rates to see how tariffs and other administration policies affect inflation and overall economic activity. Now they also have the Iran / Israel conflict to consider and how it may impact the global economy. These are the topics that the markets will be paying attention to in the Fed's post-meeting statement, economic and interest rate predictions (dot plot) and comments made during the press conference.

High

Unknown

Misc Fed

The Fed's revised projections will give us their predictions for overall economic growth (GDP), unemployment, inflation and future rate adjustments. Along with the meeting adjournment, we will also get the post-meeting statement and economic forecasts at 2:00 PM ET. The press conference with Chairman Powell will begin at 2:30 PM ET, meaning these events will affect trading and mortgage rates mid and late afternoon tomorrow.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

Treasury Auctions (5,7,10,20,30 year)

Retail Sales

Industrial Production

Housing Starts (New Home Construction)

Federal Open Market Committee (FOMC) Statement

Misc Fed

Float / Lock Recommendation