• Tuesday’s mortgage rates should be lower by approximately .125 - .250 of a discount point. The bond market is currently up 10/32 (4.61%).

 • Stocks are active but mixed with the Dow up 388 points and the Nasdaq down 314 points.

 • Yesterday’s 5-year Treasury Note auction drew a lackluster demand from investors, particularly from international buyers that heavily influence whether or not these sales go well or not. We saw a minor negative reaction to the 1:00 PM ET results announcement, but it was not enough of a move to cause an intraday increase in rates.

 • The Conference Board said late this morning that their July Consumer Confidence Index (CCI) stands at 90.8, slipping from June’s revised 92.2. The lower reading means surveyed consumers were less optimistic about their own financial situations this month than they were last month and likely to spend less.

 • Monday’s weak auction leaves us pessimistic about today’s 7-year Note sale since the terms are so close to each other. Generally speaking, a strong demand from investors would be favorable news even though the short term of these securities should prevent a noticeable impact on mortgage rates anyhow. Results of today’s auction will be available at 1:00 PM ET, making this an early afternoon event for rates.

 • Bond traders will be focused on the afternoon Fed events, assuming the Middle East holds status quo with no military action between Iran and the U.S.

 • The FOMC meeting will adjourn at 2:00 PM ET along with the official monetary policy statement release. There will be a press conference with Chairman Warsh at 2:30 PM ET.

 • This week’s FOMC meeting does not include revised economic projections or key rate predictions from individual members (aka dot-plot).

 • There is a consensus that the Fed will leave key short-term rates unchanged this week. However, there is more of a chance of a rate hike at this meeting, or at least a signal from them that one is coming soon, than there has been in quite time.

 • Recent inflation data has been cooperative in terms of the direction it has moved, but still remains well above the Fed’s preferred annual pace of 2.0%. This month’s flare up of the war with Iran has pushed oil prices higher, leading to an increase in costs at the gas pump that has reignited inflation concerns going forward.

 • Those factors could be used as justification for the Fed to bump key rates higher to help bring inflation down faster than it would do without help from the Fed.  

 • Just how much volatility and the direction it will push mortgage rates depends on what traders take away from the statement and press conference.

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

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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... Float 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.