Mortgage bond prices finished the week sharply higher which put downward pressure on rates. The Fed dominated trading and really overshadowed all the data releases. Rates improved Monday morning as the Fed ramped up their MBS buying. This continued through most of the week with the only bumps occurring Wednesday afternoon and into Thursday morning. Rates spiked higher during that timeframe as it appeared the Fed paused buying. The negative movement was short-lived, and we closed the week on a positive note. Durable goods rose 1.2% vs the expected 1.4% decline. Weekly jobless claims surged to a record 3.283M. Analysts expected 525K claims. Q4 GDP was 2.1% as expected. Mortgage interest rates finished the week better by a percentage point or more.


Economic IndicatorRelease Date & TimeConsensus EstimateAnalysis
Consumer ConfidenceTuesday, March 31,
10:00 am, et
111Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
ADP EmploymentWednesday, April 1,
8:30 am, et
-180KImportant. An indication of employment. Weakness may bring lower rates.
ISM IndexWednesday, April 1,
10:00 am, et
44.2Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates.
Construction SpendingWednesday, April 1,
10:00 am, et
Up 0.5%Low importance. An indication of economic strength. Significant weakness may lead to lower rates.
Weekly Jobless ClaimsThursday, April 2,
8:30 am, et
3 millionImportant. An indication of employment. Higher claims may result in lower rates.
Trade DataThursday, April 2,
8:30 am, et
$43B deficitImportant. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates.
Factory OrdersThursday, April 2,
10:00 am, et
Down 0.2%Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
EmploymentFriday, April 3,
8:30 am, et
Payrolls -200K
Very important. An increase in unemployment or weakness in payrolls may bring lower rates.

The Federal Reserve stepped in last week and effectively drove mortgage interest rates where they wanted with billions of dollars of coordinated purchases of mortgage-backed securities(MBS.) This was in continuation of the previous $200B effort announced earlier. The difference was the Fed indicated they were not constrained by any figure and would do whatever was necessary to “support the smooth functioning of markets.” In the short-term this meant buying billions of dollars of MBS driving mortgage interest rates lower. If the Fed wants to push rates lower, they will do everything in their power to do so. We saw the Fed do something similar over a decade ago with the 2008 financial crisis as quantitative easing policies extended years. The challenge now is the entire world is in economic crisis, nobody really knows how this all plays out, and a sharp economic blow is likely headed our way. The Fed bought us some time, but financial markets are likely to remain volatile for months. Now is a great time to take advantage of the dip in mortgage rates.