Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on June 1, 2009

Locking Stance: LOCKING    Mortgage Bonds: –62bp

Mortgage backed securities were holding their ground for a while this morning, but then it came and MBS pricing has fallen dramatically.  What was it?  The Fed’s favorite gauge on inflation, PCE (Personal Consumption Expenditures Index).

PCE was only the first on the list of data plays today, with the ISM Manufacturing Index due out in just a few more minutes.  However, damage to the markets has already been done and it will take an act of God essentially to fix that.  Core PCE was higher than expected, coming in at 0.3% versus expectations of 0.2%.  While that doesn’t seem like a big deal, remember that this reading was for April and it was before the recent run up in energy prices.  Additionally, Core PCE now stands at 1.9% annually, at the top of the Fed’s “target zone”.

As I said, in just a moment we will see the ISM Manufacturing Index, followed by short-term Treasury Auctions this afternoon.  Timothy Geithner will be speaking this evening, which may set up market movements for the morning.

What does this mean for Florida Mortgage Rates?  You guessed it, mortgage rates are back on the rise for their next leg higher most likely.

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