Determining rates

If you’re in the market for a loan and are interested in understanding how rates will be doing in the near future you need to look closely at the Economic calendar. Unemployment reports, FOMC Beige Book releases, Consumer Confidence etc. are some of the heavy hitters that moves the market. There are others.

There is a way to read it though. Generally if a positive economic report rallies the stock market then bonds suffer and lose value, since investors move money from bonds (safer) to stocks (more rewarding). This transfer usually then increases the yield (rate) on bonds. The overall result is mortgage rates inch higher. For a negative economic report the effect is exactly the opposite.

Word of caution when trying to time the rates: geopolitical events, and industry news are some of the other factors which can trump the release of an economic report. For example, the recent British hostage crisis in Iran caused oil prices to rise. This is an important factor. So, even a very solid unemployment number may not rally the stock market in such an event.

Here is the link to next weeks calandar: Economic Calendar: April 9-April 13

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