Mortgage rates caught a bit of break today, logging the first meaningful improvements in the entire month of February.  The gains weren’t much better than those seen at the end of last week, but after yesterday’s absolute rout, they were a much-needed reprieve.  Yesterday saw rates move higher at the fastest pace in more than a year, and any additional weakness today would have threatened to reintroduce 4.0% as a viable 30yr fixed rate quote for top tier scenarios.  That figure instead remains at 3.875% with an aggressive lender or two closer to 3.75%.

So is that it?  Is that the end of February’s relentless weakness?  Unfortunately, it’s too soon for such conclusions.  Way back on February 3rd, I wrote that we were in the midst of a “fairly strong move higher” and that it “should be taken seriously.”  That continues to be the case, and will only stop being the case when the strong move higher is conclusively defeated.  It could turn out to be the case that today is a turning point in that regard, but we’ll need more confirmation before considering February’s uptrend to be defeated.

On a final note, the source of today’s movement also suggests patience in assigning significance to it.  Today’s strength followed the release of the Minutes from the most recent FOMC meeting.  That meeting produced a statement that markets read as a bit harsh when it came to the level of accommodation the Fed was targeting.  Part of yesterday’s rotten rate move was fear that today’s Minutes would reinforce the Fed’s disinterest in an accommodative stance.  Instead, the Minutes showed a Fed that was thinking more in line with what markets were expecting back at the end of January.

That’s all well and good, but this sort of news is a course correction in the bigger picture unless accompanied by a separate move driven by the “stuff” that’s primarily motivating markets.  Almost all that “stuff” is European.  As February ticks down, there will be more for markets to digest with respect to the situation between Greece and it’s EU creditors.  That’s why we need to be patient in assuming today’s Fed news will turn rate momentum around, because Europe has the biggest vote right now, and it’s yet to be definitively cast.