Mortgage rates have stabilized from last week and seem to be holding steady, but there are quite a few events this week that could cause the mortgage market to move.
More Govt Debt Hits the Mortgage Market
More Government debt hits the market this week as the US Treasury unloads $126B in securities. Monday $8B in TIPS (Treasury Inflation Protected Securities) hit the market, Tuesday $44B in 2-Year Notes, Wednesday $42B in 5-Year Notes and $32B in 7 Years on Thursday. The last round of auctions did not perform very well and caused the mortgage bond market lower which means higher interest rates. This is one item I will be watching closely this week.
Bernanke Testifying to the House and Senate
On Wednesday and Thursday, Federal Reserve Chairman Ben Bernanke will be testifying on monetary policy before the House of Representatives Financial Services Committee and the US Senate Banking Committee. His comments can be a potential market mover as big news will trump any technical signals we currently have.
Not Quite Ready to Lock? Proceed with Caution
The trend beginning this week is market stabilization, however we recommend to our clients that are floating their interest rates to proceed with caution and be ready to lock if investors start to shift their money out of the bond market.
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