What’s going on and why does it matter?
Mortgage bonds opened lower today as stocks continue to rally in response to President Trump’s announcement last week that a “phenomenal” tax plan will be announced soon. Fed Chair Yellen is scheduled to give her semiannual monetary policy report to Congress on Tuesday and Wednesday. The market will be watching for any indication as to when and how the Fed will begin to unwind its massive holdings of mortgage bonds. Speculation is that the Fed will stop buying mortgage bonds sometime later this year, and the market will be looking for Yellen to confirm or deny these rumblings. The Fed’s mortgage bond purchases are very light this week because they won’t be in the market tomorrow and Wednesday due to Yellen’s testimony. In fact, the Fed is only scheduled to purchase 30-year conventional mortgage bonds during one operation later this week. As for today, the Fed is scheduled to purchase up to $1.75 billion in GNMA and 15-year conventional mortgage bonds.
What should you do about it?
Lock your rate to be safe.
Economic reports that may impact mortgage rates this week:
