Here's why an inverted yield curve is important

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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 are moving sideways so far today.  The MBS market improved by -+10 bps yesterday. This may've been enough to slightly improve rates or fees. The rates experienced moderate to high volatility yesterday.

Today's Rate Forecast: Neutral

Yield Curve: The yield curve is inverting, investors and analysts seeing the inversion as the historical signal that the economy may be heading for a recession. The inversion between the 2 and 5 isn’t much, but it is supporting the long end of the curve; 2 yr note at 2.831%, the 5 at 2.822%, the first inversion, albeit not much, the first since Sept 2007. The 10 yield down 3 bps from yesterday’s close at 9:00 am. The German 10 yr bund 0.289%, Japan’s 10yr 0.069%. The spread between the 2 and the 10 yr at 9:00 am 20 bps.

Business Conditions: The November ISM NY remained at near historical highs with a reading of 67.8 which is just off its best reading (last month) of 69.8

Fed: NY Fed President John Williams will speak today at 10.

Australia: The Reserve Bank of Australia kept their key interest rate at 1.5%

Eurozone: PPI YOY 4.9% vs est of 4.5%.

Today's Potential Rate Volatility: Low

Mortgage rates continue to drift lower on relatively low volatility. We expect the same for today. Markets will be closed Wednesday as President Trump designated it a national day of mourning in honor of George H.W. Bush, who died Friday night at age 94.

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.

©2015 Finance of America Mortgage LLC | Equal Housing Lender | NMLS 1071 Complaints@financeofamerica.com

Thomas Werbeckes

Mortgage Advisor

NMLS: 1543335

Finance of America Mortgage

6900 S McCarran Blvd #2020, Reno NV

Company NMLS: 1071

Office: 775-332-6629

Cell: 775-742-9128

Email: twerbeckes@financeofamerica.com

Web: http://www.financeofamerica.com/locations/branch-profile?id=c33827bb-71f8-6483-85d2-ff00007a9d7f

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Thomas Werbeckes

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Mortgage Advisor

NMLS: 1543335

Cell: 775-742-9128


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