Mortgage bonds are continuing to trade above all their significant moving averages, which is good news for mortgage pricing. The economic calendar is quite full this week. The market will be focused on the Fed's monetary policy statement which is scheduled for Wednesday afternoon, along with the first estimate of economic growth (GDP) for the second quarter of this year, which is scheduled for release on Friday morning.
The market doesn't expect the Fed to increase short-term rates this week. However, there is some anticipation that Wednesday's statement could be altered to pave the way for the Fed to start reducing its massive bond-buying program at some point in the fall. In the meantime, the Fed will be very supportive of the mortgage market, and today they are scheduled to purchase up to $2.075 billion of 30-year and 15-year conventional mortgage bonds. In other news, a large supply of corporate and government bonds are scheduled to hit the market this week, and this could put a damper on mortgage bond prices.
What should you do about it? Watch for mortgage bonds to remain above their 30-day and 200-day moving averages, but be prepared to lock your rate quickly if bonds start to fall back below these critical levels.
Economic reports that may impact mortgage rates this week: