Well, the Fed meeting came and went. As expected, the Federal Reserve Bank is keeping its asset purchases in place. So…no taper. As such rates moved only incrementally higher on Thursday and Friday and that move came as a result of the higher than expected Chicago ISM number on Thursday showing “the consistent increase in the Barometer over the past four months suggests the recovery is gaining traction.”
Mortgage rates bounced off their 5 month lows. Giving back the gains after the delayed Unemployment Situation Report on October 22nd. The week ended with 30 year conforming best execution rates moving from 4.125 to 4.25.
Moving to the intermediate term, the expectation of asset tapering is moved back to March of 2014. This is to be the first meeting chaired by likely incoming Fed Chief Janet Yellen.
THE FED SPEAKERS TURKEY SHOOT AND JOBS REPORT
This week brings new data points and a number of Fed directors speaking at various times and locations. Fed watchers will have many speeches to comb through to support any opinions as to conviction (or lack thereof) of the Fed’s keeping the asset purchase program at full throttle. On Friday the mortgage market turns its eye to the Employment Situation Report which includes the Non-Farm Payroll. The consensus estimate is 125K new jobs created. Any deviation will bring some movement in rates but any response is sure to be muted. The market seems to have set its mind on the ensuing asset tapering to come in 2014; not at the December 17-18 meeting.
Until the jobs number Friday we don’t foresee any meaningful movement in mortgage rates as we are right smack dab in the middle of the range. Using the ten tear treasury yields as a proxy:
As we look at the price action since the last jobs report we see that yields on the 10 year are right in the middle of the range at the 2.62 level. This was the closing level on Friday. Today, November 4th. Rates on the ten year retreated 2 basis points to the 2.60 level with no meaningful change in mortgage rates.
If you would like to contact Gil about questions about mortgages, you can call him at 312-961-4510 or email him at email@example.com for a FREE consultation. To find out more about him and the people he works with, please go to www.gilvalentine.com Gil is a licensed Loan Officer, NMLS#1019717
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