Mortgage Rate Trend Index Down: Dec. 18, 2014
Will rates go up, down or remain unchanged?
Branch manager, Sierra Pacific Mortgage, White Marsh, Maryland
U.S. Treasuries have been benefiting from a flight to safety over the last week. Concern over the rapid drop in oil prices, the Russian ruble and Russian stock market have been a major reason for this flight to safety. This bid in U.S. Treasuries has lowered their yields and mortgage rates over the last week. This move lower in rates has come despite the Fed meeting this week and the market's expectation that the Fed may hint at raising short-term rates soon by removing the phrase that rates will stay low for a "considerable time." Right now, I think concern over Russia and the drop in oil prices is weighing on markets more than what the Fed will do. I expect a small spike in rates after the Fed statement is released, but that will be reversed in the coming week with rates dropping ever lower.
President, Independent Mortgage, Newton, Massachusetts
Rates will improve, as the markets are seeing big swings both up and down. The investors are seeking shelter in the safe haven of bonds.
Senior loan officer, RPM Mortgage, San Francisco
We are seeing gigantic movement of money as a consequence of the decline in oil prices and the enormous fall in the value of the ruble. In 1998, the decline in the ruble caused the Fed to bail out hedge fund LTCM because it feared that not doing so would cause contagion and even larger losses. It will take nerves of steel for the Fed to do so when the average citizen still does not know that it was not the owners of banks, but rather the depositors who were bailed out post-Lehman.
Assistant managing editor, Bankrate.com
When investors digest the Fed's statement, Treasury yields will fall. Not much, though. Russia's desperate attempt to dissuade investors from selling their rubles will backfire. That will have an even bigger effect on Treasuries and on mortgage rates, sending both lower, as investors buy bonds in safer currencies such as the dollar.
Greg McBride, CFA
Chief financial analyst, Bankrate.com
Unless the Fed spooks the market, expect global jitters to hold sway over rates in the coming week.