Three things that can impact rates this week

Published Date 10/24/2022



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.


Mortgage rates are moving sideways today. The MBS market improved by -32 bps last week. This was enough to increase mortgage rates or fees. The market experienced high volatility last week.


These are the three areas that can have the biggest impact on rates this week. 1) Central Banks, 2) Inflation and 3) Consumer Data.

1) Central Banks: We have three major Central Bank meetings and policy statements this week. Will get interest rate hikes this week out of the Bank of Canada and The European Central Bank. The Bank of Japan is expected to stand pat on their negative rate as they continue to pump their currency into the market. The ECB will get the majority of the focus from the marketplace.

2) Inflation: We get the Fed’s key measure of inflation, Core (ex food and energy) PCE on Friday. This is expected to rise from 4.9% to 5.2% on a YOY basis.

3) Consumer Data: We get two key readings on the consumer this week, the market will focus on their inflation expectations. Tuesday’s Consumer Confidence is expected to dip from last month’s surprise higher-than-expected reading and on Friday we get the final UofM Consumer Sentiment Index.

Treasury Sales: We kick off three days of dumping our debt into the market on Tuesday.

10/25 2 year note

10/26 5 year note

10/27 7 year note


This morning markets have been moving sideways. Volatility remains the norm with potential spikes on international news and inflation data.


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

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