Three things that could impact rates this week

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Published Date 5/28/2024

Today's Mortgage Rate Summary

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up.

Rates Currently Trending: Neutral

Mortgage rates have very minor support today. The MBS market worsened by -14 bps last week. This was not enough to increase mortgage rates or fees. The market experienced moderate volatility last week.

Today's Rate Forecast: Neutral

Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) Inflation, 2) The Fed and 3) Toss Up.

1) Inflation: We will get the Fed's preferred measure of inflation, Core PCE on Friday. It is expected to gain 0.3% on top of the prior month's pace of 0.3%. A stronger than expected reading will be bad for rates while a weaker than expected reading will be good for rates.

2) The Fed: Next week is the Fed's media "blackout" period, so this is the last week of Fed speeches prior to the June FOMC meeting.

05/28 Mester, Kashkari, Cook

05/29 Fed's Beige Book, Williams, Bostic

05/30 Williams, Logan

05/31 Bostic

3) Toss Up: We have three domestic economic releases that all have equal weight this week: Consumer Confidence, the revisions to the previously released 1st QTR GDP and Chicago PMI.

Treasury Auction: Here is this week's auction schedule:

05/28 2 year and 5 year notes

05/29 7 year note.

Today's Potential Rate Volatility: High

This morning markets have a very minor positive lean. Volatility has started low but will increase later in the week.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Source: TBWS

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.