Oil and Inflation are taking their toll | Mortgage Bonds -50bp

Inital Jobless Claims 5/17 | Reported 365,000 | Est 370,000 | Prior 371,000 | MODEST

Initial Jobless claims report slightly better than expected this morning.  The economy is in a rough spot with the Feds hands being tied because of their inflation fears.  Oil hit $135 a barrel and Gold is up.  Mortgage rates will have at least a .125% increase across the board this morning until the Bond bounces off the current level of support.

Grau Perspective on Mortgage Rates for Wednesday May 21

Crude Inventories 5/17 | Reported -5,317,000 | Prior 176,000 | MODEST

FOMC Minutes 4/30 | Reported [Wed] | ELEVATED

Mortgage Backed Securities are currently -22bp on the day trading at $100.62.  We have seen solid gains the previous 5 trading days.  Bond prices have varied from 99.4375 - 100.90625 yesterday.  Today @ 2:00pm ET the Fed will release Minutes regarding last months Fed Meeting.  With Oil hitting $132.00 a barrel today, inflation concerns and Food and Energy’s impact on the economy has to been on the Feds agenda.  Now would be a good time to lock in some of those gains we have made the last few days since we could see INCREASING mortgage rates.