There are many events and economic reports that can have a direct impact on the cost of borrowing.

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Ever wonder ho9.8 blog picw all the noise around the globe will affect your mortgage interest rate? It is amazing to me how many glass balls are being juggled right now, and dropping any one of them could cause us great pain in the mortgage bond market.

At the top of the list and all over the news is Hurricane Harvey, with Irma following close behind and heading for Florida. Congress has stepped up to fund hurricane relief around the gulf coast, which is great for all those affected. I am sure much more aid will be needed, but this is a good start. The stock market was happy about the news of hurricane relief as it also came with a three month extension of the US debt limit, keeping the government funded through December 15th of this year. The mortgage bond market lost a little steam as investors moved to stocks, which led to slightly higher interest rates. Money is always in motion, so watching where investors place their dollars will give you a good indication of how rates rise and fall.

Another example that caused turmoil in the markets – tension over North Korea’s testing of nuclear weapons. These actions have posed a direct threat to the region and rattled global markets. Just the thought of any kind of nuclear event is too great to imagine. We hope for the best outcome and a peaceful solution, which would help stabilize global markets and lead to improving both the stock and bond markets (higher stock prices and mortgage rates remaining low).

When you hear comments from the Federal Reserve Chair or the response from a Fed meeting, take note of what they did and listen to what they say. The market reaction to actions or statements can make your cost of borrowing more expensive. Markets move on fear, and adjust to reality once the dust clears… Always look at the big picture!          – Randy Cullen, NMLS #326128

 

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