Wednesday, October 17, 2018
Mortgage interest rates are based on the supply and demand of mortgage bonds. Bonds depict interest rate movement and they move in opposite directions. When bond prices decrease, interest rates increase. When bond prices increase, interest rates decrease.
What’s going on and why does it matter?
Mortgage bonds are hovering near their 10-day moving average as they continue to drift sideways. Brexit is back in the news today with UK Prime Minister May scheduled to address EU leaders today ahead of their discussions on negotiations to set the terms for Great Britain leaving the European Union. Meanwhile, the big news of the day here in the US will be this afternoon’s release of the minutes from last month’s Federal Reserve monetary policy meeting. Investors will be looking for clues regarding the Fed’s sense of hawkishness/dovishness and their future monetary policy plans. On today’s economic calendar, building permits and housing starts came out slightly below market expectations.