With the Federal Open Market Committee scheduled to meet for two days beginning January 30, the Fed has entered "blackout mode" and no Fed speakers are slated for the next week. Combine Fed Silence with lack of economic data, and market are moving on emotion and gut feel.
That’s bad news for rate shoppers because there is a growing feeling among markets that the Fed’s previous 17 rate hikes may not have been enough to stop runaway growth and inflation.
It will be fairly quiet today, but as we look ahead to tomorrow’s Existing Home Sales, traders almost want to see higher-than-expected results because it would reinforce their pre-existing notions that the housing market is strong. That will push mortgage rates higher immediately.
If the numbers are in-line or even lower, however, don’t expect the opposite reaction; mortgage rates will hold flat because traders will instead shift their attention to Friday’s housing data, looking for validation that their opinions of housing are correct.