• Wednesday’s mortgage rates should be higher by approximately .125 of a discount point if compared to Tuesday’s early pricing. If you saw an intraday improvement late yesterday, you may see a larger increase this morning. The bond market is currently down 5/32 (4.62%).

 • Stocks are in selling mode with the Dow down 724 points and the Nasdaq down 200 points.

 • Yesterday’s 7-year Treasury Note auction went much better than Monday’s 5-year Note sale. The benchmarks in the results pointed to a stronger demand for the 7-year Notes compared to 5-year Notes, especially from international buyers. Bonds had already rallied from their morning levels before the 1:00 PM ET results announcement and moved modestly after it was made, meaning the auction had no impact on mortgage pricing.

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

 • The bond market is reacting to the Iran war news that looks to have expanded after Saudi Arabia was involved in the most recent military action. They assisted the U.S. in attacking Iran-back groups inside Iraq, fueling concerns that the conflict may turning into a broader regional war that everyone supposedly wanted to avoid.

 • Oil prices are up again, fueling inflation worries just as the Fed decides what to do with key rates today.

 • This week’s FOMC meeting will adjourn, and the post-meeting statement will be released, at 2:00 PM ET. There is a consensus that the Fed will leave key short-term rates unchanged today, but 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.

 • Factors such as those 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.

 • This meeting does not include revised economic projections or key rate predictions from individual members (aka dot-plot), leaving just the official statement and the 2:30 PM ET press conference with Chairman Warsh to drive trading this afternoon.

 • In addition to the weekly unemployment update we will also get June’s Personal Income and Outlays report that includes the Fed’s preferred PCE inflation readings and the initial Gross Domestic Product (GDP) reading for the 2nd quarter.

 • Those reprots will be addressed in this afternoon’s update to this report that will be posted shortly after the markets have an opportunity to react to today’s Fed events.

 • 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.