Last week saw mortgage rates hit new all time historic lows yet again. Since this has occurred a lot over the past few months, this isn’t anything new, but last week was different because 10 year treasury bonds also made new all time historic lows beating a previous record set in 1946.
Mortgage rates were driven down last weak by poor economic data, worries over the situation in the Euro Zone and ongoing concerns over the health of the Chinese economy. These factors will continue to play a role in the week ahead.
Mortgage Rates and the Week Ahead
There is very little economic data being released this week. This means that unless any one piece of economic data is far greater or worse than expected, most mortgage rate movement will be driven by news coming out of Europe and possibly China.
Investor fears over the health of the the Eurozone, specifically Greece, Italy and Spain are playing a big role in pushing mortgage rates to their current near all time historic low levels.
QE3 / Third Round of Quantitative Easing Coming?
There is also speculation that QE3 or a third round of quantitative easing by the FOMC may be in the cards after the weak Job data of last week. While that remains to be seen, it is yet one more piece of the puzzle that could play into lower mortgage rates in the coming days and weeks. Many FOMC / FED members will be speaking this week, expect the market to watch their statements closely for any hints about QE3 or future monetary policy actions by the FOMC.
Economic Calendar for Week of June 4, 2012
- Monday – Factory Orders
- Tuesday – ISM Non-Manufacturing Index
- Wednesday – Beige Book
- Thursday – Jobless Claims, Bernanke Speaks
- Friday – International Trade