Daily Commentary by Larry Baer: Mortgage interest rates are once again feeling a
little minor upward pressure this morning.
President Obama and
House Speaker Boehner appear to be making headway in their negotiations to
avert the steep tax hikes and across the board spending cuts set to take effect
at midnight on December 31st. The two sides have come
significantly closer to bridging gaps on critical issues such as tax hikes for
the wealthy and major cuts in Social Security cost-of-living benefits.
Obama and Boehner
will meet with the respective party members in Congress today to test support
levels for the compromise. Results of these meeting will either
heightened investors' perception that a meaningful deal will be reached before
the deadline - or reinforce the likelihood that it is time for all of us to
begin to brace for the coming plunge over the edge of the "fiscal
cliff."
Bear-in-mind if/when
a political compromise is reached to avoid the "fiscal cliff" --
stocks will likely rally at the expense of rising mortgage interest rates (as
long as the deal is something more than a simple extension of the current
deadline). Until/unless a fiscal agreement is achieved - a primary
support for steady to perhaps fractionally lower mortgage interest rates will
remain firmly in place.
Economic data may
cause a temporary little flutter in the market - but any substantial shift in
the current trend trajectory of mortgage interest rates will almost certainly
be tied to events surrounding the looming "fiscal cliff".
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
