June 1, 2009 started as another brutal day in the Mortgage Market. On top of the negative bankruptcy news for GM Mortgage Rates increased after a nice head fake last Thursday and Friday.  After reaching as low as 4.375% on a 30 YR in May. Mortgage Rates came in like a lamb and left like a lion (see May 2009 Mortgage Rate Chart)

It was the fourth time in 5 weeks that mortgage rates worsened.

By far, the biggest news of last week was Wednesday’s mortgage market meltdown.

Beginning shortly after 1:00 PM ET, and in the span of about 90 minutes, the 30-year fixed mortgage rate soared.  The action was so swift that a number of mortgage lenders shut down their Lock Desks, unwilling to accept new business.

There was no “news”-like reason for the action, by the way — just a general feeling on Wall Street that the U.S. government’s massive debt load may lead to inflation sometime in the future.   As inflationary fears rise, mortgage rates often rise with them and this is what we witnessed happened Wednesday.

Markets regained their cool Thursday and Friday, but could only erase half of Wednesday’s surge.

This week, look for data to determine whether mortgage rates rise or fall.  Monday and Friday will be the biggest days.

Today in addition to releasing consumer spending data from May, the government publishes the Federal Reserve’s preferred inflation gauge.

If Friday’s employment data is better-than-expected, rates should rise, too.  More working Americans means more consumer spending and spending makes up two-thirds of the economy.

Markets expect that another 550,000 workers lost their jobs last month, raising the 12-month total to 5.65 million.

Between Monday and Friday, a number of Federal Reserve members will be speaking publicly, including Fed Chairman Ben Bernanke.  Each speaker’s statements, of course, can influence mortgage rates as well.

Related posts:

1. Mortgage Rate Forecast Week Of November 09, 2009 (Chart) The First-Time Home Buyer Tax Credit was extended to April...
2. Mortgage Rate Forecast Week of September 21, 2009 (Chart) Mortgage rates were down early in the week but managed...
3. Mortgage Rate Forecast Week Of October 19, 2009 (Chart) Last week was the third consecutive week that mortgage rates...
4. Mortgage Rate Forecast November 2, 2009 (Chart) If the FOMC's press release shows optimism for the economy,...