Current Mortgage Rates for Monday, December 8, 2014

On Friday a better-than-expected November jobs report hit mortgage backed securities with the force of an Earnie Shavers right hook.  Although the market eventually found its footing, it remained somewhat staggered for the remainder of the day.  Mortgage rates deteriorated as a result of the sell-off. (For the uninitiated: the simplest explanation of how mortgage rates are calculated is that they are a function of the yield on mortgage backed securities.  When the price of MBS rises, yields fall, and mortgage rates fall.  The reverse is also true.)  The week ahead doesn’t feature much economic data of great import, and I think that we will see rates bounce around current levels until next week’s Fed meeting.


Today’s Economic Data:

There’s some short duration treasury auctions today, and we hear from Dennis Lockhart of the Atlanta Fed, but outside that, there’s not much on the docket.

The Week Ahead:



We’re not looking at a very exciting week, methinks.  On Thursday we get November’s Retail Sales report, and on Friday the Producer Price Index for November.  These are likely the most influential numbers of the week, and some of the last influential data points we’re going to see prior to the last Fed meeting of the year.  As I mentioned above, I think we’re probably in a holding pattern, rates-wise, until the Fed meeting that ends on December 17th.

Today’s Fed Speculation:

Most of the speculation right now revolves around whether or not the Fed is going to remove language from it’s forward guidance saying that rates will be kept low for a “considerable time.” Thrilling stuff.  A lot of what I read seems to suggest that the Fed will switch the language to something indicating that future rate hikes will be data dependent rather than calendar dependent, and that the expectation of a change in language is already largely baked into bond prices.  So unless the statement is more optimistic than expected, I don’t think the removal of the “considerable time” language will cause any seismic changes to the mortgage rate landscape.

This Week’s Significant Economic Data:


Monday:

• No significant data.

Tuesday:

• Job Openings and Labor Turnover Survey

Wednesday:

• No significant data.

Thursday:

• Weekly Jobless Claims
• Retail Sales

Friday:

• Producer Price Index – Final Demand
• Consumer Sentiment

source:  totalmortgage.com