This Week
I told you all last week to have your seat belts on...what a wild week of twists and turns due to the full economic calendar...the great news is the Bonds gained back some speed . Last Friday brought the monthly Jobs Report. The highly anticipated Jobs Report showed 111,000 new jobs were formed in January - and while this was below expectations of 150,000 but, there was revisions to the prior months which added 80,000 jobs to previously reported numbers! So if you take the average...we have a gain of 40,000 jobs per month and add it to January...hence the number right in line with expectations,.
Last Wednesday, it was no surprise to me when the Fed decided to keep the Fed Funds Rate unchanged at 5.25% - they indicated there willingness to keep a vigilant eye on inflation, and promise to raise rates further if inflation picks up any steam. The Fed has a favorite. And their favorite is the Personal Consumption Expenditure Index, which indicated that inflation looks to be moderating. I truly believe that the Fed likely made the right move
The personal savings rate remains negative for the US, showing that Americans actually spend more than they make across the board. In 2006, the savings rate was a negative 1.0%. This is the lowest savings rate since The Great Depression in 1933! If you feel your own savings plan may need some beefing up - please feel free to contact me.
This week
After last week's line up of high impact news and reports, this weeks economic calendar only has a few minor releases. Technical signals, in my opinion play a bigger role in the direction of home loan rates ahead. It is my thesis this week that upward momentum of Bond prices will continue (assuming no major surprises) and this will help home loan rates. Please remember when the Bond goes up, home rates go down.
As always your feedback is welcome.
Kevin
Kevin Martini - Mortgage Banker - kmartini@HomeBanc.com
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