Monday’s bond market has opened in negative territory following stock gains. The stock markets are showing sizable gains with the Dow up 75 points and the Nasdaq up 8 points. The bond market is currently down 3/32, but we will likely still see a slight improvement in mortgage rates as a result of strength late Friday. [/align][/align] This week brings us the release of only one piece of economic data, which comes tomorrow morning. Employee Productivity and Costs data for the second quarter will give us an indication of employee output. High levels of productivity are believed to allow the economy to grow without fears of inflation. I don’t see this being a big mover of mortgage pricing, especially since it is the same day as the FOMC meeting. Analysts are currently expecting to see an increase in productivity of 2.0%. A higher than expected reading could help improve bonds, but until we get the results of the FOMC meeting, we will likely see little movement in mortgage rates. [/align][/align] However, the biggest event of the week will be the Federal Open Market Committee (FOMC) meeting tomorrow afternoon. The FOMC meeting will adjourn at 2:15 PM. It is expected to yield no change to key interest rates. Usually, the post-meeting comments seem to have more of an influence on the markets than the rate adjustments themselves as the rate changes, or a lack of one, are quite often already expected. [/align][/align] Bond traders will be watching the post meeting statement very carefully. Generally speaking, a hint of more rate hikes in the future will be construed as an indication that inflation is still a concern and would likely lead to bond selling and increases to mortgage rates. If the statement gives an indication that the Fed is not as concerned with inflation as previously noted, the bond market should rally, leading to lower mortgage rates. [/align][/align] Overall, we are expecting to see a choppy week in trading and mortgage rates. We will likely see the most movement in rates tomorrow with the only important data of the week and the FOMC meeting. Wednesday’s Treasury auction may also affect rates during afternoon trading. I suspect that the rest of the week will be driven by stock market gains or losses. If the major stock indexes continue their downward trend, bonds should benefit as investors seek safe haven from the volatility. But, if stocks rally, those safe-haven funds that we have seen over the past few weeks could move back into stocks. This would drive bond prices lower and mortgage rates higher. Accordingly, I am holding the lock recommendations for the time being. [/align][/align] Considering financing/refinancing a home, recommendation.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is onlyan opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.[/align]