Should I float? Should I lock? - Daily Update for Friday, February 8, 2008

Here are the daily thoughts on floating or locking if you are asked by your clients.

As always - consult your favorite mortgage professional who will be able to offer the best advice for YOUR unique situation.

Bonds took a big tumble yesterday due to a speech by Dallas Fed Chairman "Loose Lips" Fisher. He proclaimed that inflation was on the rise and the Fed would step in and do everything possible to combat this. While this isn't necessarily bad news - it is what the Fed does - his comments are contrary to what all others are saying as well as what the reports are showing. Bonds markets reacted badly selling on the news. Though cooler heads are appearing to prevail today.

Technically speaking - the FNMA 5.5% 30 year bond broke through the 25 day moving average with a vengeance yesterday. This morning bonds have come back up to the moving average. Approaching the oversold range allows for further movement, especially if the stock market tanks.

With this the recommendation on the short term would be to let interest rates

Float

Check out Should I float? Should I lock? & Reasons to Float or Lock