Mortgage Rates Improve Slightly

The language from the Fed changed slightly last week leading bond investors to take this change as a shift in Fed policy. Their hope is that the slew of rate increases will be over following a final Fed increase in January. The result of all this was slightly lower mortgage rates over the last week.

The big economic report for this week will come on Friday when the trade balance and jobless claims reports are released. Also, with the Dow Jones Industrials hitting their highest levels since June 2001, bond traders will continue to watch the stock market. If money continues to pour into stocks, it could mean a weakening in the bond market and higher mortgage rates in turn.