Florida Mortgage Market – Special Update

by Florida's #1 Mortgage Planner on March 3, 2008

Locking Stance:  LOCKING     Mortgage Bonds:  -41bp

Mortgage bonds are down a little since our last post so we are going to change our stance to one of locking to protect further erosion just in case.  We have not lost hope yet as for lower rates ahead, but we also don’t like to gamble with your money.

Bonds are now between their 50-day MA and their 100-day MA and will likely test and bounce off that 100-day MA support layer in the coming day or two.  We believe that bonds will then push back higher, possibly breaking through the 50-day MA in the future, leading to lower rates down the road.  The Jobs Jamboree may accomplish just that.

But technicals all take a back seat to economic data and Fed speak.  Today, Plosser opened his mouth about his concerns for inflation and that is what is spooking the markets today, coupled with a flat stock market.  The ISM Index also cam e in a little better than expectations, but it was still lower than the last report, indicating further shrinking in the economy.

Alas, we have fears of recession in control based on data, but fears of inflation in control on Fed Plosser’s statements.  Since Plosser was the first to get things rolling and the fact he speaks of the future (versus past like data), inflation wins today’s battle, requiring us to err on the side of caution and go back to a locking stance.

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