Nearly 122 years ago 11 golfers showed up at Newport Country Club in Rhode Island and played a 36 hole tournament in one day. The winner, Horace Rawlins, was the very first US Open medalist and took home $150 for his performance. This year’s tournament, which begins this Thursday at Erin Hills Golf Course in Wisconsin, will pay a cool $2.2 million to the winner.
Don’t get me wrong, $2.2 million is a lot of money but not as much as the $4.4 trillion that is currently on the Federal Reserve’s balance sheet. The Fed will meet this Tuesday-Wednesday and will deliver a decision at the conclusion of the meeting. The markets are expecting another +.25% hike to short-term interest rates. As a reminder the Fed does not directly control mortgage rates. However, what could influence mortgage rates is any guidance they provide on when and how they intend on unwinding their balance sheet. The markets may be volatile following their statement.
After a relatively quiet week where home loan rates were mostly unchanged the economic calendar gets busy this week. Aside from the Fed’s meeting we’ll get fresh inflation data on Tuesday & Wednesday. Also of potential importance are Retail Sales (Wed.), Housing Starts (Fri.), and Building Permits (Fri.).
From a technical perspective mortgage rates are at the lower end of the range they’ve been within for the past six months. I think borrowers have more to lose than to gain so will recommend a locking bias.
Current Outlook: locking