Up Up and Away!

INTEREST RATES HAVE LIKELY HIT BOTTOM

Today’s headline news was the release of the reports on job creations and unemployment. Both reports rattled the markets as they have come in MUCH worse than analysts’ expected. Analysts expected to see approximately 130,000 new jobs created, and the report showed a disappointing 39,000. Furthermore, the unemployment
figure jumped to 9.8%, well above the expected 9.6%.

Normally, this kind of bad economic news would send mortgage rates lower. However, today’s jobs report now puts into question, were the recent string of economic reports a false start that the economy was improving? And will future reports coincide with today’s weak jobs report? Or was today’s reading a bump on the road to recovery? Only time will tell.

However, you can bet the Fed will be putting forth a full dose of QE2 into the economy. And now we are hearing rumors that QE3 will be forthcoming. Remember that the goal of QE2 is to create inflation, pump up stock prices and lower the unemployment rate. All of these goals result in higher mortgage rates. It is starting to look like mortgage rates may have hit their bottom and are now on their
way back up!