Daily Rate Lock Advisory

Indexes Affecting Rate Lock

Low

Neutral

Fed Talk

This morning’s early speech by Federal Reserve Governor Waller created a couple of headlines, but nothing that was a huge surprise. The most relevant was him saying he would support a decision of leaving key short-term interest rates unchanged at next month’s FOMC meeting if February’s employment data again showed the sector has stabilized. January’s Employment report showed stronger than predicted results in all three of the major headline readings that we rely on most. This is important because Gov Waller has been voting for lower rates due to fears the employment sector was crumbling. It doesn’t change what the Fed is likely to do next month, which is to leave key rates at their current levels.

Medium

Positive

Factory Orders

December’s Factory Orders report was posted late this morning, revealing a 0.7% decline in new orders at U.S. factories for both durable and non-durable goods. This decline contradicts forecasts of an increase in new orders, indicating weakness in the manufacturing sector. Accordingly, we can label the data good news for rates even though the report has had very little contribution to this morning’s bond gains.

Medium

Unknown

Consumer Confidence Index

Tomorrow morning brings us another moderately important economic release when February's Consumer Confidence Index (CCI) is posted at 10:00 AM ET. The Conference Board is expected to announce a reading of 87.3, up from January’s 84.5. The increase would mean surveyed consumers feel better about their finances this month than they did last month and are more likely to spend. This is problematic for the bond market and mortgage rates because consumer spending makes up over two-thirds of the U.S. economy. Good news for rates would be an unexpected decline in the index.

High

Unknown

Producer Price Index (PPI)

Overall, Friday is likely to be the most active day for rates because of the importance the Producer Price Index carries in the markets. The calmest day may be Wednesday unless something unexpected happens with the State of the Union speech tomorrow night. Despite a very busy calendar last week, there were a couple days that mortgage rates barely budged from the previous day. Don’t be surprised to see that happen again more than one day this week with a relatively light schedule of relevant events.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

Fed Talk

Factory Orders

Consumer Confidence Index

Producer Price Index (PPI)

Float / Lock Recommendation