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Originally Posted by bunnytrdr
Nonsense. Immediately banks change their prime lending rate, and everything that is pegged to that benchmark follows suit.
As soon as those other products change the supply of cash available for long term fixed loan vehicles, the prices of the bonds goes down, this axiomatically leads to higher yields.
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Daily Market Commentary
Last Updated: 5/10/2006
WEDNESDAY AFTERNOON UPDATE:
Today's FOMC meeting adjourned with an announcement of another quarter point increase to key short-term interest rates. This was the sixteenth consecutive increase but was expected
and has not affected mortgage rates or bond trading much. However, the post-meeting statement did lead to inflationary fears and initially, selling in the financial markets.
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The Dow has rebounded from the initial selling, currently standing up 20 points, while the Nasdaq remains down 12 points. The bond market has given back its earlier gains, currently standing +1/32. This will likely lead to many lenders revising rates higher this afternoon by approximately .125 of a discount point.
Tomorrow morning will brings us the first piece of important economic news. April's Retail Sales data will be posted at 8:30 AM. This is an extremely important report for the financial markets as it measures consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, this data can have a pretty significant impact on the markets. Current forecasts are calling for an increase in sales of approximately 0.8%. A smaller than expected increase should push bond prices higher and mortgage rates lower. However, a larger increase could fuel bond selling and lead to higher mortgage rates early tomorrow.
If I were considering financing/refinancing a home, I would....
Lock if my closing were taking place within 7 days...
Lock if my closing were taking place between 8 and 20 days...
Float if my closing were taking place between 21 and 60 days...
Float if my closing were taking place over 60 days from now...
This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.