FHA, Economic News, Mortgage, kennesaw, acworth, powder springsAs expected, Ben Bernanke & Co. left the Fed Funds Rate unchanged at 5.250% last week but that didn’t stop markets from improving slightly overall. 

Markets were buoyed by a low reading on last Friday’s PCE index, the Fed’s favored inflation measure.

Low inflation readings are good for mortgage rates so it’s no surprise that as the week opens, mortgage rates are about 0.125% lower than at the start of last week. 

Of course, different home loan products carry different risks so the drop isn’t present equally in all mortgage types.

Because Independence Day falls in the middle of the week this week, many traders are just taking the whole week off.  Therefore, expect very light trading in mortgage bonds. 

Low trading volume, of course, creates volatility as buyers have a hard time finding sellers and vice versa.

The major wildcard this weekend is Friday’s Non-Farm Payrolls report (i.e. the jobs report).  Economists are predicting 120,000 new jobs created. 

If the number is off the mark, expect a more wild ride than normal.  If the actual falls short, rates should improve; if it’s running hot, rates should spike.

Fun Fact Of The Day: Congress made Independence Day a federal holiday in 1870, but didn’t make it a paid federal holiday for government employees until 1941.

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