Mortgage Rates Remain Steady Following Trump Assassination Attempt. How Markets Are Reacting
The assassination attempt on former President Donald Trump over the weekend could have far-reaching implications not only for the 2024 election but, surprisingly, for mortgage rates as well.
Mortgage rates tend to rise in a strong and inflationary economy. And Trump is seen by markets as the more pro-economy and inflationary candidate.
So far, financial markets believe the attempt on the former president’s life improves his chances of winning the presidency.
The Dow Jones Industrial Average was up around 200 points on Monday morning as traders bet on a Trump win in November, says CNBC.
Trump has proposed a 10% tariff on all imported goods if elected and up to 60% for goods from China, says CBS News. Economists from all walks agree that tariffs would be an inflationary action, pushing prices up for U.S. consumers.
All this could spell higher mortgage rates. Luckily, there has been little reaction so far to Trump’s increased chances of election victory.
How Mortgage Rates Are Reacting To the Assassination Attempt
It’s still too early in the trading week to report lasting mortgage rate changes.
However, we can look to the 10-year Treasury yield – an interest rate that often mirrors mortgage rate movements – as an indicator. As of this writing, the 10-year yield was up about 0.04% compared to its Friday close, but still considerably lower than earlier last week before positive inflation data was released. This means mortgage rates could be slightly higher today, but lower than most of last week.
Image: CNBC, red square added to show higher yields after assassination attempt.
All in all, the assassination attempt did not seem to dramatically sway mortgage rates.
This is consistent with CNBC’s report that there was “remarkably little” talk about the shooting among economists, according to Bryn Jones, head of fixed income at Rathbones, in emailed comments to the news organization.
How Could The Event Affect Mortgage Rates Closer to the Election?
All else being equal, expect higher mortgage rates if Trump appears to be leading in national polls. There could be no material movement if Biden gains traction. A Biden win would be business as usual, whereas a Trump win could usher in hotter economic and inflationary factors, as discussed above.
According to Mortgage News Daily, though, there may not be much movement for either candidate unless one party sweeps the House, Senate, and Oval Office, since this would clear the path to more easily pass new legislation.
Traders will continue to consider economic reports for the bulk of their decisions. Inflation numbers and other indicators can have a bigger effect than political developments.
As a home buyer or refinancing homeowner, it’s usually unproductive to bet on news when planning financial moves. Rates could be much different than anyone expects. As we saw over the weekend, life and markets are wildly unpredictable.
The best move is to lock in a mortgage rate when you’re ready to buy or can save money with a refinance.