Rates End Week Up Just Slightly

Happy Friday from Local Mortgage!

After declining for several weeks in a row, mortgage rates ended their improvement streak, moving back up just slightly, enough to put us back to 6.00% for our very best 30-year fixed Conventional scenario.

Rates remain focused on oil prices and war-related developments. Trading remained in a fairly tight range as markets followed headlines regarding ceasefire extensions. Tuesday’s extension and Thursday’s news of a definitive three-week timeframe helped keep markets relatively calm. For now, the market is generally betting on de-escalation as seen in stocks being near all-time highs and bond yields being well off the highs seen in late March.

What little economic news there was this week was positive for the economy, albeit its impact was minimal. Consumer spending, which accounts for two-thirds of US economic activity, was stronger than expected as Retail Sales in March surged to 1.75%, which was the largest monthly increase in over a year. While economists had anticipated that larger than usual tax refunds would provide extra ammunition, they also had to factor in that the enormous rise in gas prices in March might sap some of that strength.  Even excluding the record rise in sales of gas, unexpected strength was seen broadly across all sectors.

Next week will be a busy week for traditional market influencers. The Fed meeting will take place on Wednesday, with no change in the federal funds rate expected. Investors will be looking for guidance about the impact of higher oil prices on future monetary policy. For economic reports, the PCE price index and first quarter GDP will be out Thursday with the ISM Manufacturing Index following on Friday.

Hope everyone has a great weekend and thank you for reading.