New Economic Update After a couple of highly volatile weeks, there were few price swings in mortgage rates last week. With no major surprises in the economic data and little new information from central bank officials, mortgage rates ended nearly unchanged from the prior week. One reason that mortgage rates remain near the best levels of the year is low inflation. The Consumer Price Index (CPI) report released, the most widely followed monthly inflation indicator, was just 1.7% higher than one year ago. This was well below the Feds target level of 2.0%. A separate indicator, the PCE price index, which is also closely watched by Fed officials has revealed even lower levels of inflation. There is little pressure on the Fed to tighten monetary policy with inflation at these levels (remember, “tightening” monetary policy means increasing rates). The housing market data released showed improvement. Existing Home Sales posted a modest increase in September to the best levels of the year, while inventories of existing homes for sale dropped a bit. September New Home Sales saw a slight increase from downwardly revised August levels, bringing them to the highs for the year as well. The big story this week will be the Fed meeting on Wednesday. Investors are seeking information about the timing of the first fed funds rate hike. Please let us know if you have any questions or if there is anything we can do to assist you and/or your family and friends this week.
Posted on: Mon, 27 Oct 2014 16:26:32 +0000
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