If you are shopping for a mortgage to buy a home or refinance your mortgage you may want to take note of when the Federal Open Market Committee meets throughout the year in 2010. The outcomes of their meetings typically has an impact on Wall Street and thus Federal Treasuries which ultimately impacts mortgage interest rates.
The Federal Open Market Committee meets generally 8-9 times per year for either one day or two day meetings. Here is the schedule for 2010:
- January 26-27
- March 16
- April 27-28
- June 22-23
- August 10
- September 21
- November 203
- December 14
As is customary, upon adjournment, the Fed will issue a press release to the markets recapping its views of the country’s current economic condition, and the outlook for the near-term future.
The post-meeting statements from the Fed are brief but comprehensive. And Wall Street eats them up. Every word, sentence and phrase is carefully dissected in the hope of gaining an investment edge over other active traders.
It’s for this reason that mortgage rates tend to be jittery on days the FOMC adjourns. Wall Street is frantically rebalancing its bets.
If you are in a position to lock your interest rate around these times, you may want to check with your loan officer to get their general assessment of what might happen with rates.
One trend to keep your eye on might be this: if you hear that the economy is slowing just prior to one of these meetings you may consider holding on your lock because this could point to investors pulling money out of Wall Street and putting their money in Treasure Bonds which will tend to lower rates. Conversely, if the economy is being reported as speeding up or growing, you may want to lock ahead of the meeting as Wall Street may surge after a positive Fed report. With Wall Street booming, investors pull money out of the Treasury Bonds which would tend to push mortgage interest rates up.
If I can offer guidance in this area around rate locks, I tend to think that if you are happy with the rate you are quoted and you are qualified at that rate, you may think twice about playing with rates too much. What happens if you don’t lock and rates go up just before you are supposed to settle on your home? Bad things may happen like you may not qualify or you may get stuck with a higher payment than you wanted. So be aware of rates and locking – it may not be the risk to monkey around with them too much.
