Mortgage Rates Depend on Response to President, September 20, 2010

Limited data push presidential comments during town hall today to the top of potential movers of mortgage rates.  Rates are expected to open neutral with potential for some improvement following the President's comments.

Mortgage Rate Trend Direction:      Neutral

Economic Reports/Rate Impact:     No Economic Reports Released Today Key

Key News:                                            President Obama's Town Hall Meeting on Business/Economy

Summary

With no economic data today, two events will likely move markets today.  First, anticipation of tomorrow's statement from the Federal Reserve's Open market Committee (FOMC) following their quarterly meeting will provide an important assessment of their view of the economy.  Will they signal additional quantitative easing?  Second, President Obama will conduct a town hall meeting today focused on business and economic issues.  Will he announce any new policies?  With all the uncertainty surrounding these future events, I expect mortgage rates to open neutral to slightly better this morning and to stay relatively flat unless President Obama makes unexpected news during his town hall.

Impact of economic reports

No official economic data will be released today.  Speculation has begun over the expected language in the FOMC's statement tomorrow.  Most analysts expect an almost verbatim replay of the previous statement, pledging to hold rates low while promising to intervene with additional measures if the economy weakens further.  Should this, indeed. be the content of the statement, it will very little effect on mortgage rates.

Impact of international or political events

President Obama's town hall meeting could move mortgage rates today in either direction.  Ironically, statements that suggest he might take action to improve the economy (cutting spending, cutting taxes, reducing regulation) would likely be bad for rates.  Comments that are simply political in nature, blaming others for the state of the economy and not suggesting that he might support the actions above would likely be good for mortgage rates.

It should be an interesting afternoon.