Analyzing the Financial Market: What’s Shaping Mortgage Rates This Week?
E3 Home Loans
E3 Home Loans CA
Published on May 2, 2023

Analyzing the Financial Market: What’s Shaping Mortgage Rates This Week?

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The financial market is constantly fluctuating, and it can be difficult to keep up with the latest news and trends. Yesterday, rates took a big jump as bonds lost ground, resulting in many lenders repricing worse. The market was rocked by the stronger April ISM manufacturing index, which increased in all areas from March. This renewed concerns that the Fed may have more tightening to do than was widely expected. Mortgage bonds ended the day right at technical support provided by the 50-day moving average.

Although the market experienced a challenging day yesterday, this morning brought some respite as Eurozone inflation increased slightly compared to last month, although the core number was lower than expected. As a result, this prevented a difficult opening for bonds due to overseas activity.

The Fed starts its meeting today and will break and release its rate and policy statement tomorrow, followed by Fed Chair Jerome Powell’s press conference. Markets have priced in a .25 rate hike at this meeting, and all eyes will be looking for signals of whether the Fed will pause after what will be the 10th rate hike in a row. Markets are currently pricing in a pause after this hike, with the Fed rate expected to stay at 5% until at least November before seeing a couple of small rate cuts by the end of the year.

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Based on the current speculation of markets on the Fed, we would have to see some really hawkish comments to push rates much higher from here. The Reserve Bank of Australia unexpectedly raised its cash rate by 25 bps to 3.85%, indicating that additional tightening may be required.

In addition to the news from the financial market, there are other factors to consider, such as the US debt ceiling. Treasury Secretary Yellen said in a letter to Congress that the Treasury Department could exhaust its extraordinary measures by June 1 if there is no deal to extend or suspend the debt ceiling.

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With all of these factors in play, it can be overwhelming to try to navigate the financial market. However, there are some steps you can take to better understand what is happening and make informed decisions.

First, it’s important to stay up-to-date with the latest news and trends in the financial market. This can involve reading financial news articles, following experts on social media, or listening to podcasts. By staying informed, you’ll have a better understanding of what is happening and why.

Second, it’s crucial to have a financial plan in place. This includes setting financial goals, creating a budget, and establishing an emergency fund. By having a plan in place, you’ll be better equipped to weather any changes or challenges that arise in the market.

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Third, it’s important to work with a financial advisor or professional. They can provide expert guidance and help you make informed decisions based on your individual financial situation and goals.

In conclusion, the financial market is constantly changing, and it can be difficult to keep up with all of the news and trends. However, by staying informed, having a financial plan in place, and working with a professional, you can make informed decisions and navigate the market with confidence.

 

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