Friday November 26, 2010 5:30 PM ET
By John Sauro
Bonds Remain Pressured
The bench mark 3.50% coupon lost and additional 60 basis points this week to settle at $97.93, putting lenders in a position to once again re price for the worse. The fact that Bond prices closed below the important support level of $98.12 could be signaling that the sideways trend is over and the downtrend is resuming with the next level of support at $97.00. This is not good news for Mortgage rates. However, even with the recent run up in mortgage rates, interest rates are still historically low.
Quantitative Easing 2
The Fed “Meeting Minutes” were released this week. The Fed has finally acknowledged that a weaker Dollar could be good for a stronger recovery. You think? The Fed has been silent on this point as it has accused China of the very same currency manipulation.
While this may be good for the economy, the stock market and will help to spur inflation, it is most certainly not good for interest rates. Especially home loan rates.
I continue to recommend locking into rates.