Mortgage rates marched higher as early hints of inflation and the partial unwindof the post-Japan flight-to-safety trade put bond investors in a selling mood most of the week. When bonds sell-off, prices fall and yields, or rates, rise, with the predictable impact on Mortgage rates: Benchmark 30 year fixed added nearly .25% by the close of trading Friday.
A fairly full economic calendar this week has one particular entry that mortgage rate watchers should circle in red ink: Friday’s Employment Report. The economic recovery story is one almost entirely about jobs, so any meaningful improvement in the employment situation will likely be answered with rising mortgage rates. The consensus among prognosticators is that about 200,000 jobs were created in March, and that the unemployment rate will stay at 8.9%. Anything higher than that may push mortgage rates higher, but be alert for revisions to prior months reports, which can send markets spinning in directions that the headline employment rate or job-created number does not indicate.
This Week’s Economic Calendar [Econoday]