Present Market Conditions
Mortgage Bonds kick off Monday near unchanged in what will be an action packed week. Along with a heated economic calendar, slew of corporate earnings and additional Treasury securities being sold off, the Fed will release their monetary policy decision and statement on Wednesday at 2:00 p.m. ET.
There is a near zero percent chance of a hike this week, just a 17% chance in June and a 47% probability of a hike in September, but the statement can always send a ripple through the financial markets.
The Fed's policy announcement comes out on Wednesday afternoon, and although they're not expected to hike rates at this meeting, many feel they'll use the venue to telegraph the next rate hike. Whether or not that happens, markets will likely react. In other words, there is potential volatility ahead for mortgage rates. Although volatility can take rates in either direction, the bigger risk at the moment is that the recent trend toward higher rates continues.
Overall, watch for Wednesday the Fed Policy meeting, Rates continue to drift higher, We have a ton of data and the Fed on deck this week. The trend is the trend until it isn't.