• Monday’s mortgage rates should be fairly close to Friday’s early pricing due to bond volatility late Friday. The bond market is currently down 5/32 (4.19%).

 • Stocks are also in negative ground with the Dow down 185 points and the Nasdaq down 21 points.

 • There is no relevant economic data scheduled for release today.

 • This morning’s negative open in the bond market (and stocks for that matter also) is due to news that broke last night that the Justice Department has opened a criminal investigation into Federal Reserve Chairman Powell regarding his congressional testimony about the massive renovation project of the Fed’s buildings.

 • Many in the markets believe this is merely political retribution for the Fed not meeting President Trump’s insistence to lower key short-term interest rates more than they have already and not a true case of Chairman Powell breaking the law.

 • The news and the reaction go to the importance that the Fed remain completely independent and shielded from political sway. If the Fed loses that reputation of being independent, the markets will also lose confidence in their monetary policy decisions. Accordingly, we are seeing a negative reaction as investors price additional risk into the markets.

 • Unfortunately, this is likely not a single day or one-off move. We could see further responses if this investigation continues, or additional cases are opened against other Fed members.

 • We do have an afternoon event that has the potential to affect rates later today. 10-year Treasury Notes are being sold today with results being announced at 1:00 PM ET. This is relevant because mortgage rates are based on long-term debt, so a strong demand for the securities could contribute to an improvement in bond prices and mortgage rates this afternoon. This scenario will be repeated tomorrow when 30-year Bonds are sold.

 • Tomorrow has two of this week’s five monthly economic reports with one being the highly influential December Consumer Price Index (CPI).

 • The CPI will tell us how inflation was at the consumer level of the economy last month. The overall reading is expected to have risen 0.3% from November and have held at 2.7% year-over-year. More importantly, core data is expected to be up 0.3% for the month and have risen 0.1% annually from November’s 2.6% pace. Good news for rates would be softer than expected readings. It would also make another Fed rate cut in the near future more of a possibility.

 • New Home Sales data is tomorrow’s second release. This shutdown-delayed update will cover sales of newly constructed homes in September and October. It usually carries a weak influence on rates because it tracks only a small portion of all home sales in the U.S., but since the data in this week’s release is now aged, we are not expecting to see its results have any impact on rates.

 • Overall, tomorrow is the most important day of the week for rates due to the influence the CPI has on the markets, but we may also see a big move Wednesday with so much information coming, including another inflation index and a key consumer spending report. The calmest day should be Friday unless something unexpected happens.

 • With a packed calendar of relevant events this week, it would be prudent to keep an eye on the markets if still floating an interest rate and closing in the near future because we are expecting to see quite a bit of volatility, especially the middle days.

 • Visit our Daily Commentary page on our site for detailed explanations on current news that is relevant to mortgage rates.

CLICK HERE to view full detailed report and recommendations

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.