Published Date 6/13/2022

TODAY’S MORTGAGE RATE SUMMARY
HOW RATES MOVE:
Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up.

RATES CURRENTLY TRENDING: HIGHER
Mortgage rates are moving higher today. The MBS market worsened by -127 bps last week. This was enough to increase mortgage rates or fees. The market experienced high volatility last week.

THIS WEEK’S RATE FORECAST: HIGHER
Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) The Fed, 2) Central Banks and 3) Inflation.

1) The Fed: On Wednesday we get the Fed’s Interest Rate Decision and Policy statement. The market widely expects a hike of 50BPS with many now hedging for 75BPS after last week’s CPI print. But of equal importance is the release of their Economic Projections which is used to create the “dot plot chart”. Their forward guidance in those projections will have a dramatic impact on rates.

2) Central Banks: While our FOMC is getting the lions-share of attention, their are other major Central Banks having their own meetings and policy statements this week. Of note is the Bank of England and the Bank of Japan.

3) Inflation: Last week’s CPI print showed that inflation is still a very real threat to the consumer and the economy and this week with the front end of that equation with the Producer Price Index.

THIS WEEK’S POTENTIAL RATE VOLATILITY: HIGH
This morning markets are still under heavy pressure. Volatility is very high.

BOTTOM LINE:
If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Source: TBWS

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

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