Interest Rates Move Down a bit this week

Interest rates moved down a bit this week.The following are excerpts from the newsletter on interest rates published by HSH Associates :

“Building political tensions and saber-rattling from North Korea, Japan going nearly all-in on quantitative easing and a worrisome downshift in economic activity helped bonds to rally this week, driving some yields down to 2013 lows. Mortgage rates followed right along, moving downward somewhat, offering a little better opportunity for folks to finance or refinance with rates a little nearer to record lows.

If the effects of the spending sequestration are still largely unassimilated into the economy, this recent economic slowness could be exacerbated. As a result, the economy may simply continue to limp along, failing to produce a period of strong growth that would allow for tapering or termination of the Federal Reserve’s monetary IV drip.

Of course, that’s good for mortgage rates.

After cresting over 2% a couple of weeks ago, the steady drumbeat of not-as-good-as-expected data and various global issues have helped interest rates to fall, mortgage rates among them. The slippage in rates this week should persist into next week and may allow some of the more marginal refinance candidates a crack at it again. Rates are likely to slip over the next couple of days, just in time for the spring homebuying season to get fully underway.

Absent a spate of really good news from the forthcoming retail sales, weekly jobless claims or consumer sentiment reports, average rates can be expected to fall by perhaps a tenth percentage point (0.10%) over the next week. It will be interesting to see the minutes of the Federal Reserve’s last meeting, due out Wednesday, where some discussion of how to taper or end the Fed’s QE programs will probably be revealed. At the moment, any tapering or ending before year end seems unlikely.”

The following are interest rates quotes from Al Hermann of American California Financial: