If there had been any economic news today, the markets would have ignored it. Today's massive market mover was President Trump and his conversation with Mr. Comey where he asked the then FBI director to halt an investigation into Michael Flynn and Russia. Headlines have continued to fly all day and none brought any calm to the markets.
The Dow fell by 372 points, the worst day in over 8 months, closing at 20,606, as concerns about the FBI controversy weighed on investors and sent them running for safety. Fears that Mr Trump's agenda will be delayed or killed permeated the air. As the markets dropped, the odds of a Fed hike diminished and sent bank stocks tumbling as the volatility index increased by 37% today. Hopes for a Fed rate hike diminished.
Ten-Year bond yields benefited from the flight to security, with the yield dropping a full .10%, closing at 2.22%, music to the mortgage rates' ear!
The dollar also fell to a six month low as safe haven currencies such as the Yen gained nearly 2% against the dollar. Get the picture? The markets are being moved by the #TrumpFearFactor.
Mortgage rates are dropping. While not every bank dropped their rates today, tomorrow should be a banner day for rates. If the mood continues then expect to see 30 Year fixed rates below 4%, and arm rates drop as well.
One hates to admit that the country's political melt down is a boon to mortgage rates, we do like rates to be lower when we apply for a mortgage. As soon as my clients close, then the world can correct itself.
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