Monday Market Commentary: Mortgage Rates Crossroads

by Alex Stenback on October 1, 2007

                                                                         Graphic via MSNBC
Last Week:
The mortgage interest rate market unwound a bit on Friday as renewed inflationary fears crept into the trading pits.  Sparked by some hawkish anti-inflation commentary by several Fed officials, Friday’s sellof resulted in a rise in rates of .125% for most mortgage products.
This Week:
The economic calendar this week has some serious market-moving potential as traders will be looking for direction.  Is the economy entering (or in) recession?  Does it matter if the recession is accompanied by persistent inflation?  From a mortgage interest rate standpoint, a slowing economy and moderating inflation will help move rates lower.  Friday’s employment report will be closely watched – barring any substantial revisions to previous reports, a weak report will open the door for lower rates.  A strong report could send rates up fairly quickly.
This Week’s Econocalendar [Barron's]

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