• Friday’s mortgage rates should be approximately .125 of a discount point higher than Thursday’s early pricing due to strong selling in bonds late yesterday. The bond market is currently up 5/32 (4.24%).

 • Stocks are showing gains also, pushing the Dow up 169 points and the Nasdaq up 86 points.

 • Yesterday’s 30-year Treasury Bond auction went much better than Wednesday’s 10-year Note sale. The benchmarks pointed to demand from investors that was a little above average compared to other recent sales. This gives some hope that investors still have an appetite for long-term securities, which is relevant because mortgage rates are based on long-term debt.

 • Unfortunately, the auction doesn’t carry anywhere close to the importance level it would have needed to derail the negative momentum in bonds right now. We did see a positive move immediately after results were announced at 1:00 PM ET, but the market had already soured prior to the release and the bump was short-lived. Bonds actually closed in a worse position than they were before 1:00 PM ET as inflation concerns drive yields and mortgage rates higher in what seems like a daily event these days.

 • The most important data in this morning’s batch of four economic reports were the Personal Consumption Expenditures (PCE) Indexes within January's Personal Income and Outlays report. Today’s release revealed a 0.3% rise in the overall PCE in January and a 0.4% increase in the more relevant core PCE. Both monthly readings matched forecasts.

 • It also showed a 2.8% annual rate for the overall reading that was slightly slower than December’s 2.9%. Analysts were expecting to see it hold at December’s rate. However, while the overall reading came in a bit softer than predicted, the year-over-year core reading rose from December’s 3.0% to 3.1%.

 • After considering today’s results and the fact that there is likely a world of difference between January’s inflation and what March and April may show due to the Iran war, this data is a non-factor for mortgage rates.

 • The other headline readings in this report showed income and spending both rose 0.4% in January. Personal income was expected to be up 0.5% with spending up 0.3%. Less income means consumers have less to spend, but it appears they spent more even though income fell short of forecasts.

 • For as much as we were fearing what this morning’s inflation data may show, we were also expecting the revised Gross Domestic Product (GDP) reading to be equally irrelevant. That turned out to be incorrect because the first revision to the 4th Quarter GDP told us the economy grew only at a 0.7% annual rate during the last three months of the year when it was expected to be unchanged from the initial estimate of 1.5%.

 • Yes, 4th quarter data is aged now since it covers the months of October through December and market traders are more interested in the current quarter’s activity. However, this was a sizable downward revision and comes well before the Iran conflict that is expected to negatively impact economic growth. The 4th Quarter revision likely has many analysts revising their 1st Quarter numbers much lower than they were expecting to do.

 • This morning’s third report gave us mostly favorable news. January's Durable Goods Orders report showed new orders at U.S. factories for items such as electronics, refrigerators, airplanes and autos were unchanged from December’s level. Forecasts had orders up 1.2%, meaning the manufacturing sector was weaker than expected as the new year began.

 • Closing out this week’s activities was the release of March’s initial Index of Consumer Sentiment from the University of Michigan at 10:00 AM ET. The announced a reading of 55.5, down from February’s 56.6. The decline means fewer surveyed consumers felt better about their own financial situations this month than last month. Waning confidence usually translates into softer consumer spending that makes up over two-thirds of the U.S. economy.

 • Next week has a much lighter schedule of economic releases compared to this week. It looks as if there were twice as many posted this week than next and there is just one relevant Treasury auction scheduled after this week’s two sales.

 • We also have another FOMC meeting taking place that includes revised economic projections and key rate predictions from Fed members. Those predictions will be quite interesting to see after witnessing the huge spike in oil prices.

 • The week starts Monday morning with the release of the moderately important Industrial Production report for February, along with any weekend headlines regarding Iran and/or oil prices.

 • Wednesday will be the most important day due to the morning release of February’s Producer Price Index (wholesale inflation) and the afternoon of FOMC events.

 • Look for details on all scheduled activities in Sunday evening’s weekly preview.

  • 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... 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.