Rates Down Slightly Despite Heavy Dose of Data
Mortgage rates ticked down slightly this week, fluctuating within a narrow range for most of the last seven days after several key economic releases and news offered mixed signals about the state of the U.S. economy.
The modest decline came as a wealth of economic data was released this week, including many reports that often move the market. Encouraging figures, led by a positive initial reading of first-quarter GDP, were counterbalanced by reports that fell short of expectations: Consumer spending results were disappointing, and inflation figures were muted once again. As a result, bond yields – and mortgage rates – spent much of the week oscillating within a narrow band.
Rates did break through their narrow range on Wednesday, falling after an important manufacturing index declined to its lowest level since October 2016. But this downward shift in mortgage rates will likely rebound, because Treasurys rose following the culmination of April’s Federal Open Market Committee meeting in which Fed Chairman Powell, citing strong economic fundamentals but still lagging inflation, suggested that neither a rate hike nor a rate cut would be necessary for the immediate future.
With the April jobs report due Friday, noteworthy rate movements may be on the horizon, but without a meaningful uptick in inflation figures, the odds of this are slim.
