Episode 22: What Moves Mortgage Interest Rates?

Welcome to Episode 22:  What Moves Mortgage Interest Rates?.  In this episode Ryan and Bryon are bridging the gap by asking the question what moves mortgage interest rates?  Some of the topics we will touch on in this episode:•        What causes interest rates to go up or down?•        How does inflation affect rates?•        What is currently going on with inflation?•        What is our take on inflation and future of rates?What causes interest rates to go up or down?Mortgage rates are tied to the mortgage backed securities bond market.  Investors move their money into bonds to protect the value of their dollar.  In an inflationary environment, dollar is stronger and as a result investors sell their bonds or mortgagage backed securities in favor of higher return investments like CD’s.  When the 30 year MBS goes down, rates go up.  How does inflation affect rates?Inflation means more dollars competing for less goods so demand is higher than supply which cause the cost of something to go up.  In this case investors have opportunities for bigger returns in different investment vehicles other than mortgage backed securities so they unload their positions causing the bond market to fall which inversely causes rates to go up.What is currently going on with inflation?We have higher energy costs, shelter costs and vehicle insurance costs whichare the three main drivers of inflation right now.  Until the Fed sees inflation stabilize at no more than 2% we will continue to see them hold their position to not cut rates.  The reality is inflation is likely to remain stubborn and we have less than a 47% chance of a rate cut by July.What is currently going on with inflation?We believe that it will likely take higher unemployment numbers to move the needle with the Fed to cut rates.  While we continue to see unemployment numbers remain low, it is mostly because people are taking on 2nd jobs and part time work to supplement their income.  The jobs data is not really a solid indicator of what is actually happening in the market.  With a likelihood of a global monetary crisis on the horizon we believe unemployment will spike which will force Feds hand to have to cut rates.  Right now the Fed is walking a fine line between trickery and divinity.Wrap UpFind us on our facebook page to reach out to us with any questions or help you with financing needs to to join our rate watch program: https://www.facebook.com/AllInUncensoredLink for our website: www.allinuncensored.com Also, please subscribe to our show which will be available on most media platforms (spotify, apple, youtube, iheart radio, google) and you can catch how lips on our instagram and youtube channels! Thanks again for tuning in! It’s another great day!