We’ll get a read on home sales and a sense of how the Fed feels the economy is doing.
• The two-day FOMC meeting begins on Tuesday and ends Wednesday at 2:00 p.m. ET with the release of the Fed’s monetary policy statement.
• Look for housing news with Existing Home Sales on Wednesday and New Home Sales on Friday.
• Weekly Initial Jobless Claims will be released as usual on Thursday.
• Durable Goods Orders will be delivered Friday.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.
When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.
To go one step further, a red “candle” means that MBS worsened during the day, while a green “candle” means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.
As you can see in the chart below, Mortgage Bonds have benefited from weak economic data in recent days. Home loan rates remain attractive.
Chart: Fannie Mae 4.0% Mortgage Bond (Friday Mar 16, 2018)