Friday Market Wrap - 4/17/15
I know, it's not Friday. In some parts of the country, it's actually Sunday, but since our rates don't change over the weekend we're still OK. Rates had a good week, and though the markets saw some volatility, it was a relatively calm week. Rates are still sitting very close to their all time lows, so home 
buyers and home owners alike are in great shape to lock in a rate.
Overall, the markets are remaining stable due to uncertainty in both domestic and international economies, and the fact that a Fed rate hike is almost completely off the table through the month of June, and likely won't be considered until September.
Several members of the Fed spoke this past week, and it seems like Fed officials are divided over whether or not to pursue a tighter monitary policy by raising rates. On one hand, we're treading water economically, without making any real major gains. On the other hand, loose economic policy can't continue forever, so at some points they'll need to raise rates. I personally think they're very cautious on the heels of the recent recession, fearing that a premature rate hike will push us right back into economic decline.
European markets are currently helping rates, as Greece & the Euro zone are continuing the debate over Greece's economic woes. As this has been ongoing for years, it's unlikely a true resolution will come about any time soon, but the uncertainty helps convince investors to park funds into less risky investment products, like mortgage bonds.
One surprising thing to pay attention to in the coming months is inflation, the arch enemy of bonds. For the first time in quite a while, inflation readings came in higher than expected on Friday. Inflation has been quite tame for a long time (the main reason rates have been able to remain low for so long), and if it increases over the coming months, you can rest assured rate hikes will be on the way sooner than later.
Next week is light on economic news, so much of the market movements will depend on economic sentiment, global markets, and geopolitical news. I think rates should remain low in the near future, but we'll see the same peaks & valleys for rates that we've seen over the past several months, so it remains prudent to lock a rate in if you have the opportunity. Rates go up much faster than they come down, so it's worthwhile to take advantage of the market, lock in, and be happy that you're able to get a rate in the 3's. Historically, this may be about as low as they go.
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