What's going on and why does it matter?
Mortgage bonds opened flat this morning as financial markets seem to be having a mixed reaction to last night's bombing in the UK. The market is also in somewhat of a holding pattern as there is continued lack of confidence in President Trump’s fiscal agenda. The Fed will be modestly supportive of the mortgage market today with a purchase of up to $975 million of GNMA mortgage bonds. The Fed will be back in the market tomorrow with a more sizable purchase of 30-year conventional mortgages. For the time being, it seems that mortgage bonds are inclined to continue drifting sideways in a trading range between their 30-day and 200-day moving averages.
What should you do about it?
Lock your rate while bond prices continue to hover near the top of their recent trading range.