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By G. Steven Bray
The past couple weeks have been an unusually quiet period for mortgage rates, but why? US Economic data hasn’t missed expectations enough to warrant attention. Other economies, while still demonstrating weakness, haven’t provided any surprising headlines. World hot spots aren’t bubbling over. While the quiet represents a pleasant change, based on history, it probably won’t last much longer.
Later this week, the Greek debt drama may come to a head. It seems likely Greece will default of required debt payments, but it may make no difference to interest rates. The Greek drama seems old news to markets now.
Of greater import is next week’s Federal Reserve meeting. April was the earliest month mentioned for the Fed to start raising short-term interest rates, but very few analysts expect that to happen. Most expect the Fed will wait until later in the year. However, markets will watch the Fed’s commentary very carefully for its assessment of the strength of the economy and hints of a firm start date for rate hikes. Any deviation from expectations will affect rates, although I think the risk is greater for rates to rise. Should the Fed indicate the economy is strengthening, rates could rise quickly to levels we haven’t seen since late last year.
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