Monday, March 21, 2011
Interest Rate Forecast for March 21st-25th 2011
It appears the key word this week is going to be “INFLATION”. With rising inflation overseas, especially in China, and last week’s economic reports in the United States showing better than expected, it appears inflation is going to get here sooner rather than later. The effect will be investors pulling their money out of the Mortgage Backed Securities and Treasuries to place the funds into the equity markets. You have to remember in the mortgage world - inflation is our worst enemy - it erodes the value of those fixed return securities.
This combined with easing tensions in Libya , investors are rapidly pulling their money from the safe haven of the bonds to place in the stock market where a greater return is anticipated.
This leads us to believe that we will see a week of volatility and a trend toward higher rates.
As always if you have questions regarding this release, please do not hesitate to contact the loan officer that sent you this link.
Michael Liles - NMLS 91257
Director of Secondary Marketing
Advantage Loans, Inc.