Mortgage rates worsened towards the end of last week, but still showed an overall improvement. Today we are seeing rates worsen and inflation is back in the news. Rates are pretty good, this will will either set a nice floor or make a breakout to higher numbers.

 

Mortgage rates worsened a little last week, and stock rallied for 5 days. I am thinking rates may worsen this week as well, with a potential China resolution on trade coming and Companies start announcing last quarter earnings. We also have housing data, inflation data, and Retail Sales for December. If all of these are good, Stocks should rally which will drive mortgage rates higher.
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With the sell off last week in stocks, it was anticipated at rates would improve nicely, but when it all settled, we have just a slight improvement. This week is HUGE as we have the Federal Reserve on Wednesday and LOTS of data on Friday, right before a major holiday. Will the Fed Raise rates (which would be good for us) on Wednesday, or wait until January? This week is going to be rough.

 

Mortgage rates are on a cusp of jumping quite a bit higher, as the 10 year Bond and the Mortgage Bonds are close to making a jump, which would allow rates to jump in to the mid 5%.  We are going to watch Federal Reserve decision on Thusday, not for a rate increase, but for what their policy statement is.  Then on Friday we will have Producer Price Index, or inflation at the producer level, and also this week the US is going to sell of more of our debt, which will influence rates also.  Gonig to be another roller coaster week for rates, with the consensus that rates will increase.