This week marks the first Federal Open Market Committee meeting. These are tremendously influential meetings that are always big movers on mortgage rates. This should be the major driver of mortgage rates this week and we’ll see the press release on Wednesday afternoon. At this point, there is little likelihood of the Fed Funds Rate changing from it’s current target of 0.000-0.250%.
When looking at mortgage rate predictions, you need to take them all with a grain of salt. It’s nearly impossible to identify exactly what mortgage rates will do, but it’s critical to know what will be driving them. This week, it is 100% about the Policy Statement or press release. If the Fed sees lingering risks or concerns, mortgage rates could drop a little bit lower. On the flip side, if they see an economy that is in a normal recovery phase, rates could easily jump higher and quickly.
Today’s Existing Home Sales report came in very soft, but so far the market has shrugged it off. We see New Home Sales and Case-Shiller results this week as well, but it looks like all eyes are on the Fed’s statement Wednesday.
The only certainty for this week’s mortgage rate predictions is that it will be volatile. We’ll update the current mortgage rates on Wednesday afternoon after the news breaks. This should be a very interesting meeting as the Fed gives us the first opportunity in 2010 to see what they are thinking.