Updated on January 25, 2022 10:07:16 AM EST

Starting this week’s economic releases was Januarys Consumer Confidence Index (CCI) at 10:00 AM ET this morning. The Conference Board announced a reading of 113.8 that was a decline from December’s reading but higher than forecasted. The decline means surveyed consumers were less optimistic about their own financial situations than they were last month and less likely to make a large purchase in the near future. However, since it came in a bit stronger than predicted, we can consider the data neutral for mortgage rates.

We also have the results of today’s 5-year Treasury Note auction to watch. They will be posted at 1:00 PM ET, meaning if there is a reaction, it will come during early afternoon trading. A strong demand from investors could help boost bond prices and lower mortgage rates slightly later today. On the other hand, a lackluster interest in the securities would be unfavorable for mortgage rates.

There is an economic release set for tomorrow morning, but it is not considered to be of high importance and is nowhere near as influential as the afternoon events. The economic report is Decembers New Home Sales data at 10:00 AM ET. It measures housing sector strength and mortgage credit demand. However, it usually does not have a significant impact on bond trading or mortgage rates unless it comes out with a significant surprise because it covers such a small part of all home sales. Tomorrow’s update is expected to show an increase in sales of newly constructed homes, hinting at strength in the new home portion of the housing sector. The smaller the number of sales, the better the news it is for bonds and mortgage rates.

Tomorrow’s big news will come during afternoon trading when this week’s FOMC meeting adjourns at 2:00 PM ET. There is a strong consensus that Fed Chairman Powell and friends will leave key short-term interest rates unchanged at this meeting. Still, there is a high likelihood of seeing volatility in the markets tomorrow afternoon. Traders will be looking at the post-meeting statement for clarification of the Feds plans, particularly regarding when they will start raising short-term rates. Many analysts think that the March meeting is the timetable they will follow. Any indication of it coming sooner should be taken as bad news for bond and mortgage rates. A later date should help boost bonds and lower rates during afternoon trading. This meeting will be followed by a press conference with Chairman Powell but does not include revised economic projections. This is an afternoon event that could have a big impact on the financial and mortgage markets tomorrow afternoon and Thursday morning.

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