Prior to Friday's employment report, every economic data report came in lower than expectations, resulting in the overall outlook that the Fed would increase its easement based on the FOMC statement released last week.  Friday's report has analysts reassessing the outlook.  With one month of data, we do not expect that it will result in a serious impact.  However, if economic data continues to trend upward, the Fed will very likely decrease its purchasing of MBS's.

The 10 yr. note has lost all of its momentum resulting in an increase to interest rates and virtually leveling all gains that had been realized since mid April.

Treasury rates continue to increase this morning resulting in weaker MBS prices.

We will need more economic data next week to clarify how the Fed will react.  The stronger report has increased concerns that the Fed will possibly take the QE away sooner than anticipated.

Stay in contact with your mortgage specialist to insure that you capitalize on any improvements and avoid any loss of rebate currently available.

- Michael Corboy