WEDNESDAY AFTERNOON UPDATE:

This week's FOMC meeting has adjourned with an announcement that key short-term interest rates were left unchanged. The post-meeting statement indicated that current economic indicators were mixed and acknowledged that the housing sector woes are "ongoing." They did reference inflation as the main risk to monetary policy right now, but failed to address the current turmoil in the sub-prime mortgage market.

Overall, the statement was fairly neutral in my opinion. The fact that a few words were omitted from this statement that were present in the previous few have some traders thinking the Fed may be leaning more towards lowering key rates than raising them. Particularly noted was the absence of the "additional firming" comment regarding inflationary pressures. This seems to be the rallying point for the markets during afternoon trading as it was widely expected that the Fed would leave short-term rates unchanged.

The markets have moved much higher than pre-adjournment levels with the Dow currently up 150 points and the Nasdaq up 37 points. The bond market has also rallied, erasing morning losses to currently stand up 7/32. This will likely lead to an afternoon improvement in mortgage rates of approximately .125 - .250 of a discount point.

The Fed statement nor the markets' reaction to its words have not changed my opinion. I think the reaction is more of a knee-jerk move than a driving force for future gains. Accordingly, I am holding the current recommendations of a cautious approach towards mortgage rates. I would not be surprised to see bonds erase this afternoon's gains by the end of the week. I just don't see anything concrete in the statement that should influence a different approach. I feel that the risk versus reward scale of floating an interest rate continues to be heavily tilted towards the risk side.

Tomorrow morning brings us the release of the Conference Board's Leading Economic Indicators (LEI) for February. This index attempts to measure economic activity over the next three to six months. Current forecasts are calling for a 0.3% decline, indicating that economic activity will likely slow in the coming weeks. This would be good news for the bond market and mortgage rates.

Also tomorrow morning will be the we ekly release of unemployment claims from last week. Analysts are expecting to see 325,000 new claims, which would be an increase of 7,000 from the previous week. However, this data is no likely to influence mortgage rates unless it varies greatly from forecasts.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Lock if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Monday's bond market has opened in negative territory with no relevant economic news scheduled for release and early stock gains taking center stage. The stock markets are rallying with the Dow up 118 points and the Nasdaq up 24 points. The bond market is currently down 7/32, which will likely push this morning's mortgage rates slightly higher.

This week is pretty light in terms of economic releases scheduled to be posted, however, it does bring us another Federal Open Market committee (FOMC) meeting for the markets to digest. There are three reports due to be released this week, but none of them are considered to be of high importance.

February's Housing Starts will be released early tomorrow, but it will likely not have much of an impact on mortgage rates. It gives us a measurement of housing sector strength and future mortgage credit demand, but is usually considered to be of low importance to the financial markets. It is expected to show an increase in starts from January to February.

The FOMC meeting begins tomorrow and is expected keep key short-term interest rates unchanged. What will likely cause volatility in the markets is the post-meeting statement. Traders are hoping to pick up an indication of future Fed moves, particularly if the Fed expects to cut rates anytime soon. The meeting is the second o f four meetings this year that last two days and will adjourn at 2:15 PM ET Wednesday. Therefore, look for afternoon changes in rates Wednesday.

Overall, look for Wednesday to be the most important day of the week due to the FOMC meeting. The rest of the week will likely be driven by outside factors such as stock movements. If the stock markets stage a significant rally or sell-off, we should see bonds move in the opposite direction. I don't expect the economic data to influence mortgage rates unless they vary greatly from forecasts. With a lack of data likely to fuel a bond rally, I am holding the lock recommendations until at least after the FOMC statement Wednesday afternoon.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Lock if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Thursday's bond market opened down slightly despite a surprising jump in producer level prices. The stock markets also have shrugged off the news with the Dow up 30 points and the Nasdaq up 6 points. The bond market is currently down 2/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.

The Labor Depa rtment gave us this morning's big news with the release of February's Producer Price Index (PPI). They said that the overall reading rose 1.3% last month, greatly exceeding forecasts of a 0.5% rise. Even the core data gave us a stronger than expected reading of up 0.4%. This indicates that prices at the producer level of the economy were higher than expected, which raises inflation fears. Fortunately for mortgage shoppers, the markets seem to be looking past this release in anticipation of tomorrow's CPI reading.

Also posted this morning was weekly unemployment claims. The Labor Department said claims fell to 318,000 last week, which was lower than the 325,000 that was expected. However, this news usually isn't of high interest to the markets, especially when other data is released the same day.

There are three pieces of data scheduled for release tomorrow. The first is February's Consumer Price Index (CPI), which is similar to today's PPI except this inde x tracks prices at the more important consumer level of the economy. It will also have two readings for the markets to digest. It is expected to show a 0.3% rise in the overall readings and a 0.2% increase in the core data.

February's Industrial Production report will be posted at 9:15 AM ET. This report measures manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to show a 0.3% increase during February. As long as this report does not exceed forecasts by too much it will probably have only a minor influence on the mortgage market tomorrow.

The last release of the week is not a government-issued report. The University of Michigan's Index of Consumer Sentiment for March will be posted at 9:45 AM. This index gives us a measurement of consumer willingness to spend. If confidence is rising, then consumers are more apt to make large purchases. This helps fuel consumer spending and economic growth. A drop in confi dence will probably hurt the stock markets and boost bond prices, leading to lower mortgage rates. If the index rises, indicating that confidence is rising and spending is likely to continue, we may see mortgage rates move higher late tomorrow morning. It is expected to show a reading of 89.0, down from February's 91.3.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Lock if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Wednesday's bond market opened in negative territory but has since recovered those losses after stocks fell into negative ground. After showing early gains, the stock markets have slipped into the red with the Dow currently down 31 points and the Nasdaq down 2 points. The bond market is currently unchanged from yesterday's close, which should keep mortgage rates near yesterday's closing levels.

There is no relevant economic news scheduled for release today. I am expecting to see bonds move today in relation to the major stock indexes. If the stock markets stage another afternoon sell-off as they did yesterday, bond prices will likely move higher as investors shift more funds into the bond market for safety. However, I believe that bonds are at the high end of its recent trading range and may find it difficult to improve much more. If the stock markets move back into positive ground today, we could see bond prices drop and mortgage rates move higher during afternoon trading.

With an expectation of funds shifting back out of bonds, I am holding the lock recommendations for the time being. If we see any factor that causes selling in bonds, such as sizable stock gains or stronger than expected inflation news, I believe that bond prices will fall quickly. In other words, the risk versus reward scale is leaning toward s risk in my opinion. There is a possibility of seeing bonds move higher and mortgage rates improve, but the slightest piece of bad news could erase recent gains. Accordingly, I am taking a conservative stance on the recommendations.

Traders are anxiously waiting for tomorrow's important inflation news. The Labor Department will post February's Producer Price Index (PPI) early tomorrow morning. This very important index measures inflationary pressures at the producer level of the economy. There are two portions of the index- the overall reading and the core data. The core data is more important and watched more closely because it excludes more volatile food and energy prices. If the index shows a large increase, inflation concerns may rise, making long-term investments such as mortgage-related bonds less attractive to investors. This would lead to higher mortgage rates tomorrow morning. Current forecasts are calling for a 0.5% rise in the overall reading and a 0.2% increase in the core data.

The week closes with three reports Friday, including the even more important Consumer Price Index (CPI). The next couple of days are likely to be quite interesting.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Lock if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

This week brings us the release of five economic releases for the bond and mortgage markets to digest along with a 10-year Treasury Note auction. There is relevant economic news scheduled for release each day except tomorrow and Wednesday. Three of the five reports are considered to be of high importance to the markets. This means that we will likely see a notice able move in rates several days of the week.

The first report is February's Retail Sales data early Tuesday morning. This report is extremely important to the financial markets because it measures consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, data that is related to spending usually has a big impact on the financial markets. This month's report is expected to show an increase in sales of approximately 0.3%. If we see a smaller than expected increase, the bond market should rise and mortgage rates will likely fall. If it reveals a larger increase, I expect to see bond prices fall and mortgage rates rise Tuesday morning.

The Labor Department will post February's Producer Price Index (PPI) early Thursday morning. This index measures inflationary pressures at the producer level of the economy. There are two portions of the index- the overall reading and the core data. The core data is more important and watched more closely b ecause it excludes more volatile food and energy prices. If the index shows a large increase, inflation concerns may rise, making long-term investments such as mortgage-related bonds less attractive to investors. This would lead to higher mortgage rates Thursday morning. Current forecasts are calling for a 0.4% rise in the overall reading and a 0.2% increase in the core data.

There are three pieces of data scheduled for release Friday. The first is February's Consumer Price Index (CPI), which is similar to Thursday's PPI except this index tracks prices at the more important consumer level of the economy. It will also have two readings for the markets to digest. It is expected to show a 0.3% rise in the overall readings and a 0.2% increase in the core data.

February's Industrial Production report will be posted at 9:15 AM ET. This report measures manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to show a 0 .3% increase during January. As long as this report does not exceed forecasts by too much it will probably have only a minor influence on the mortgage market Friday.

The last release of the week is not a government-issued report. The University of Michigan's Index of Consumer Sentiment for March is expected to be posted at 9:45 AM. This index gives us a measurement of consumer willingness to spend. If confidence is rising, then consumers are more apt to make large purchases. This helps fuel consumer spending and economic growth. A drop in confidence will probably hurt the stock markets and boost bond prices, leading to lower mortgage rates. If the index rises, indicating that confidence is rising and spending is likely to continue, we may see mortgage rates move higher late Friday morning. It is expected to show a reading of 90.5, down from February's 91.3.

Overall, it will likely be another active week in the mortgage market. Tuesday, Thursday or Friday can all be labeled as the most important day of the week. Any of the three can lead to a significant change to mortgage pricing, but I am thinking Tuesday or Friday will likely brings us the biggest moves. The Treasury auction is scheduled for Tuesday, but its results will not be posted until 1:00 PM ET. If investor demand was high, we may see bonds rally during afternoon trading, however, weak demand could lead to selling an increase to mortgage rates. Generally speaking, this week is definitely a good one to maintain contact with your mortgage professional if an interest rate has not been locked yet.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Lock if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were fin ancing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Friday's bond market has opened down sharply following the release of this morning's Employment report. The stock markets are mixed with the Dow up 10 points and Nasdaq down 2 points. The bond market is currently down 18/32, which will likely push this morning's mortgage rates higher by approximately .250 of a discount point.

The Labor Department gave us today's big news, showing a drop in the U.S. unemployment rate of 0.1% during February. It was expected to remain at 4.6%, but now stands at 4.5%. The new payrolls number came close to forecasts with 97,000 new jobs added. The bad news was an upward revision to January payrolls of 35,000, meaning more jobs were created during January than previously thought. Both of these readings are bad news for bonds.

The bond market was 0 for 3 in the key portions of the report. Strike three came in the average earnings reading that showed a larger increase than was expected. The report showed that earnings rose on average 0.4% last month. This raises wage inflation concerns and contributed to this morning's bond losses.

The other report of the day was January's Goods and Services Trade Balance. It revealed a trade deficit of $59.1 billion, which was lower than forecasts had called for. However, this data is considered to be of low importance and had no impact on t his morning's bonds trading or mortgage rates.

This morning's bond reaction didn't exactly come as a surprise to me. After the recent rally in bonds, I thought we needed to see weaker than expected results on at least two of the three major portions of the report for bonds to move much higher. Accordingly, the lock recommendations were being held into the release. I expect to hold those recommendations until we see favorable results from the upcoming economic releases.

Next week brings us the release of a couple of very important reports, including two key inflation indexes and retail sales data. The first important report is scheduled for Tuesday, but there are also important releases due to be posted Thursday and Friday. Look for more details on next week's events in Sunday's weekly preview.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place betwe en 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.