The French Election and Mortgage Rates April 2017

Emmanuel Macron and Marine Le Pen received 23.9% and 21.4% of the vote this weekend.  For the most part the final tally was in line with polls held in the prior week.  Macron is a centrist candidate and Le Pen, leader of the Front National party, is a far right candidate who is running on an Anti-Immigration platform along with a push for France to leave the EU.  

The French election was the first before a national run off; in which seven candidates ran.  Macron is a novice and a new comer to national politics and many are already starting to rally around him to prevent Le Pen from winning.  The French election was seen as something similar to Britain and the United States however it appears Le Pen will have a harder time.  Reason is the previous elections in Britain and the US were seen as a surprise by many so French citizens who may of not voted are expected to turn out in large numbers against Le Pen.

Macron Le PenThe French election may have a negative affect on mortgage rates in the short term; however I would not expect it cause a massive increase in mortgage rates.  California refinance rates should still be near their recent lows as the bond market processes the initial French election.  Later in the week Trump will release his tax plan and many are saying the cuts are very dependent on a new health care bill being passed.  However TumpCare 2.0 is already meeting with resistance and some are saying it’s worse than the first health care bill that failed to even get a vote.  Mortgage rates may come under pressure after his tax plan is released if the plan is well received by Congress and the Senate.  Since mid-March mortgage rates have improved and that “rally” in the bond market appears to be doing well.