Daily Rate Lock Advisory

Indexes Affecting Rate Lock

Medium

Unknown

Treasury Auctions (5,7,10,20,30 year)

Activities begin tomorrow afternoon when results of the day’s 20-year Treasury Bond auction will be posted at 1:00 PM ET. A strong demand for the securities could help improve bonds and lead to slightly lower mortgage rates. Both of last week's auctions drew decent interest from investors, leaving us optimistic that this week's sale may follow suit. However, if tomorrow’s sale does not go as well as those did, we could see bonds weaken and mortgage rates move higher tomorrow afternoon.

High

Unknown

Retail Sales

May's Retail Sales report is the first piece of economic data coming this week. It is considered to be highly important to the financial and mortgage markets because it will give us insight into consumer spending habits and that category makes up over two-thirds of the U.S. economy. Analysts are expecting to see a 0.6% decline in sales and a 0.2% increase if more costly and volatile auto transactions are excluded. Good news for bonds and mortgage rates would be weaker spending numbers since softer consumer spending restricts economic growth.

Medium

Unknown

Industrial Production

Tuesday morning also brings us May's Industrial Production data at 9:15 AM ET that measures manufacturing strength by tracking output at U.S. factories, mines and utilities. This report is considered to be only moderately important to mortgage rates and should require a sizable variance from forecasts for it to influence mortgage rates. Expectations are for a 0.1% increase from April's production. A decline would be favorable news for mortgage pricing, but the sales data will draw much more attention than this report will.

Low

Unknown

Housing Starts (New Home Construction)

Wednesday's sole monthly economic release will be May's Housing Starts report at 8:30 AM ET. It tells us the number of new home groundbreakings. This is not considered to be as important as other housing reports and usually has a minimal impact on mortgage rates. Market analysts are expecting to see a minor decline in new home construction starts last month. Good news for the bond market and mortgage rates would be a noticeable decline in groundbreakings.

High

Unknown

Federal Open Market Committee (FOMC) Statement

This week's FOMC meeting will adjourn Wednesday afternoon. This meeting also includes revised economic projections from the Fed and a post-meeting press conference with Fed Chairman Powell. There is a strong consensus that the Fed will leave key short-term interest rates unchanged at this meeting. They have previously stated they will be taking a wait and see approach towards key rates to see how tariffs and other administration policies affect inflation and overall economic activity. Now they also have the Iran / Israel conflict to also consider and how it may impact the global economy. These are the topics that the markets will be paying attention to in the Fed's post-meeting statement, their predictions (dot plot) and comments made during the press conference.

High

Unknown

Misc Fed

The Fed's projections will give us their predictions for overall economic growth (GDP), unemployment, inflation and future rate adjustments. The meeting will adjourn at 2:00 PM ET as will the release of the post-meeting statement and economic forecasts. The press conference with Chairman Powell will begin at 2:30 PM ET, meaning these events will affect trading and mortgage rates mid and late afternoon Wednesday.

Low

Neutral

Holiday Schedule

With the financial markets closed Thursday for the Juneteenth Holiday, most of the lenders that are open for business will likely use Wednesday's afternoon rates or may opt to delay rate locks until Thursday's pricing comes out. Because it is a single day closing, we shouldn’t see any pre-holiday pressure that often precedes an extended weekend. Since there will be no economic news releases and the markets are closed, we will not be posting a Thursday morning update to this report.

Medium

Unknown

Leading Economic Indicators (LEI) from the Conference Board

The last report of the week will be May's Leading Economic Indicators (LEI). The LEI is a Conference Board release that attempts to predict economic activity over the next several months. Since it comes from a business research group and not a governmental agency, its impact on rates is often minimal. Current forecasts show a 0.1% decline in the indicators. A larger decline would be good news for the bond and mortgage markets.

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Unknown

none

Overall, Wednesday is the most important day for rates by default due to the potential the FOMC events have. Tuesday’s Retail Sales report means we could see a noticeable move in rates that day also. The calmest day could be Friday, assuming something unexpected doesn’t happen. It would be prudent to keep an eye on the markets if still floating an interest and closing in the near future, especially the middle days of the week.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

Treasury Auctions (5,7,10,20,30 year)

Retail Sales

Industrial Production

Housing Starts (New Home Construction)

Federal Open Market Committee (FOMC) Statement

Misc Fed

Holiday Schedule

Leading Economic Indicators (LEI) from the Conference Board

none

Float / Lock Recommendation