What's going on and why does it matter?
Mortgage bonds are continuing to drift sideways as financial markets open the week both hopeful and apprehensive about economies reopening. There has been an increase in coronavirus cases in Wuhan, South Korea, Japan, Singapore, and Germany after recent easing in lockdowns which is raising fears of a second wave in Covid-19 and a return of restrictive measures. The Fed is scheduled to purchase up to $5 billion in mortgage bonds each day this week, which is down from up to $6 billion per day last week. Meanwhile, the supply of new mortgage bonds being issued is running at around $7 billion per day. There is also a deluge of government bonds hitting the market to fund the various stimulus programs, and this may put a damper on bond prices. The economic calendar is empty today, but it picks up tomorrow. The week will see a number of Fed appearances including Fed Chair Powell who will discuss current economic issues in a Wednesday morning webcast.
What should you do about it?
Lock your rate to be safe.
Economic reports that may impact mortgage rates this week: