Seattle Real Estate Mortgage Rates Today 2/10/2011

Seattle / Bellevue Real Estate Mortgage Rate Watch: Long needed support came from 10 Year auction results yesterday which received an A+ rating. Rates improved immediately following the auction results.  Today at 10:00 PT $16B in 30 Year Bonds will be auctioned.  Wall Street closely watching these results for how much and who is purchasing.  We are hopeful the same results as yesterday will be received on the 30 year auctions, improving rates and bouncing off of the spike in rates we have had over the last eight days.  We will post results after the 10:00 results.

As for the Federal Reserve meeting with the House Budget Committee yesterday….. Ben Bernanke and his board still feel that Quantitative Easing 2 $600 Billion Stimulus is still necessary to fuel Stocks, Create Inflation and Lower Unemployment.  The question most asked was how much inflation would be created, how soon and to what impact that would have on employment.  All questions that need to be addressed much like the national deficit and how will it be reduced.

The big story or should we say gamble is the speculation on when the Federal Reserve would hike the Fed Funds rate to control inflation.  Originally it was only a 20% chance they would raise in December 2011, this has NOW moved up to an 82% chance!  KEEP IN MIND that less than a month ago the chance was raised to a 100% chance they would hike in January 2012.  NOW DECEMBER??? The economy continues to show gradual improvement.  OIL is on the rise.  Cost of FOOD is on the rise.  All signs of inflation.  This will be how the FEDS fight inflation, by HIKING rates.  BUT with rate hikes comes the price to pay on higher mortgage rates.  So for now we will have some peaks and  valleys in rates.  The GAMBLE would be to hedge on rates HIGHER by the end of 2011.  The odds are stacked against the odd of rates moving much lower from here.

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