| Market Comment
Mortgage bond prices finished the week lower which pushed rates higher. The Core PCE, the Fed’s favored inflation gauge, fell 0.1% as expected. Personal income rose 0.2% and spending was unchanged. The ISM Index was weaker than expected. ADP employment showed the economy added 177,000 jobs in April which was near the expected 170,000. Productivity showed a sharp decrease of 0.6% in the first quarter. Analysts looked for a 0.1% increase. There were no surprises from the Fed as they left rates unchanged and indicated they will continue to reinvest in mortgage-backed securities which is good for rates in the short term. Unemployment came in at 4.4% versus the expected 4.6%. Payrolls rose 211,000 versus the expected 180,000 increase. Mortgage interest rates finished the week worse by approximately 1/8 of discount point.
LOOKING AHEAD
Economic
Indicator |
Release
Date & Time |
Consensus
Estimate |
Analysis |
| 3-year Treasury Note Auction |
Tuesday, May 9,
1:15 pm, et |
None |
Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| 10-year Treasury Note Auction |
Wednesday, May 10,
1:15 pm, et |
None |
Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Weekly Jobless Claims |
Thursday, May 11,
8:30 am, et |
240K |
Important. An indication of employment. Higher claims may result in lower rates. |
| Producer Price Index |
Thursday, May 11,
8:30 am, et |
Up 0.1%,
Core up 0.2% |
Important. An indication of inflationary pressures at the producer level. Weaker figures may lead to lower rates. |
| 30-year Treasury Bond Auction |
Thursday, May 11,
1:15 pm, et |
None |
Important. Bonds will be auctioned. Strong demand may lead to lower mortgage rates. |
| Consumer Price Index |
Friday, May 12,
8:30 am, et |
Down 0.1%,
Core down 0.1% |
Important. A measure of inflation at the consumer level. Weaker figures may lead to lower rates. |
| Retail Sales |
Friday, May 12,
8:30 am, et |
Up 0.4% |
Important. A measure of consumer demand. A smaller than expected increase may lead to lower mortgage rates. |
| Business Inventories |
Friday, May 12,
10:00 am, et |
Up 0.2% |
Low importance. An indication of stored-up capacity. A significantly larger increase may lead to lower rates. |
| U of Michigan Consumer Sentiment |
Friday, May 12,
10:00 am, et |
97 |
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
Yellen
Fed Chair Yellen has a difficult road ahead. She wants to raise rates but the recent disappointing growth figures make a hike in the short term difficult. The last thing the Fed wants to do is tip the economy the other way. The Fed indicated last week that, “The Committee views the slowing in growth during the first quarter as likely to be transitory and continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, labor market conditions will strengthen somewhat further, and inflation will stabilize around 2 percent over the medium term.”
The good news is that rates remain historically favorable. Now is a great time to get a low interest rate mortgage ahead of any potential rate volatility.
Copyright 2017. All Rights Reserved. Mortgage Market Information Services, Inc. www.ratelink.com The information contained herein is believed to be accurate, however no representation or warranties are written or implied.
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