Barring Fed Move, Mortgage Rates Likely To Climb
If you decided to hold off on refinancing your mortgage, you may have missed your chance. After hitting all-time lows, mortgage rates have crept above 5% once again and many analysts feel that it will likely stay above that figure barring a Federal Reserve move to intervene once again in the mortgage securities market.
While the stock market probably won’t see a big rally this year, many investors feel that the free fall is over and that it’s time to start getting back in. Of course that can change in a heart beat with many on Wall Street down on earnings for the most part.
That being said, we’re seeing pressure for higher yields in the market, across the board. For the most part that all starts with Treasury yields which have also started to climb recently in anticipation for the glut in supply once the government starts selling it’s massive debt it has accumulated over the past year.
The housing market still hasn’t recovered so it’s not out of the realm of possibility that the Fed may intervene, although for now signs point against it. The market is forward looking and while inflation is expected to remain flat in the short term, there is the expectation of higher inflationary pressure in the long run.
Commodities have also started to creep back up and depending on how global demand reacts, it will likely determine if the Fed feels if it is safe to pump more money into the system and purchase additional mortgage and Treasury securities.
