Mortgage rates improved slightly last week, even as stock markets experienced a moderate bounce.
While economic news continues to highlight subpar economic activity, a few more signs of hope
appeared last week. Retail sales slipped by 0.1%, which was less than the 0.4% expected. More
encouraging was that "core" retail sales, which excludes auto-related items, rose for the second month
in a row. This type of news is leading some economists, including Fed Chair Bernanke, to believe that
we could be near the bottom, with a chance of economic recovery starting in 2010.
The Fed meets again this week and is unlikely to change economic policy. However, if the Fed
announces that its programs are working as planned, and it announces that the programs will continue
until economic recovery is fully realized, we could see some downward pressure on rates, especially if
investors, even just a few, begin to move back into the secondary market. Of course, if the rally in
stocks accelerates, rates might be forced upward as money moves out of the bond market.
4.50%
4.75%
5.00%
5.25%
12/24 1/7 1/21 2/4 2/18 3/4
30Yr 15Yr 1Yr ARM
6,500.00
7,000.00
7,500.00
8,000.00
8,500.00
9,000.00
16-Dec 30-Dec 13-Jan 27-Jan 10-Feb 24-Feb 10-Mar
Short-Term 10 Yr T-Note 2.900% COSI 3.760%
Long-Term 6 Month Libor 1.902% CODI 2.572%
Volatility High Prime Rate 3.250% MTA 1.514%
0.00
3.00
6.00
9.00
Mar-04 Mar-05 Mar-06 Mar-07 Mar-08
1 Yr CMT MTA COFI
CODI Prime
Industrial Production
3/16 -1.8% -1.0%
Significant
With expectations for another sizable drop, any reading above -0.5%
would rally stocks, but put some downward pressure on mortgage rates.
Another unexpected jump in the PPI could serve to generate some fears
of upcoming retail inflation and rates could be pushed up slightly.
an above-expectations reading usually pushes rates up, a reading
of 0.2% would calm deflationary fears and help keep rates flat.
With the debate intensifying over government management of this
recession, a statement regarded as weak could move rates upward.
After two months of unexpected increases, a third month could add to the
hopes of economic recovery, but rates would feel upward pressure.
Leading Economic Indicators
3/19 0.4% -0.3%
Moderate
FOMC Policy Announcement
3/18
Significant
Consumer Price Index (core)
3/18 0.2% 0.1%
Significant
Producer Price Index (core)
3/17 0.4% 0.2%
Moderate
Historical Rates
This Week's Top Economic Reports and Events
Mortgage Rate Interest Rates and Indexes
Trends
1 Yr T-Bill 0.680% 11th D. COFI 2.455%
Dow Jones
Mortgage Rates 
4.50%
4.75%
5.00%
5.25%
12/24 1/7 1/21 2/4 2/18 3/4
30Yr 15Yr 1Yr ARM
Dow Jones
6,500.00
7,000.00
7,500.00
8,000.00
8,500.00
9,000.00
16-Dec 30-Dec 13-Jan 27-Jan 10-Feb 24-Feb 10-Mar
This Week's Top Economic Reports and Events
Mortgage Rate Interest Rates and Indexes
Trends
1 Yr T-Bill 0.680% 11th D. COFI 2.455%
jkl;\Short-Term 10 Yr T-Note 2.900% COSI 3.760%
Long-Term 6 Month Libor 1.902% CODI 2.572%
Volatility High Prime Rate 3.250% MTA 1.514%
Historical Rates
0.00
3.00
6.00
9.00
Mar-04 Mar-05 Mar-06 Mar-07 Mar-08
1 Yr CMT MTA COFI
CODI Prime
Industrial Production
3/16 -1.8% -1.0%
Significant
With expectations for another sizable drop, any reading above -0.5%
would rally stocks, but put some downward pressure on mortgage rates.
Producer Price Index (core)
3/17 0.4% 0.2%
Moderate
fsdaAnother unexpected jump in the PPI could serve to generate some fears
of upcoming retail inflation and rates could be pushed up slightly.
Consumer Price Index (core)
3/18 0.2% 0.1%
Significant
While an above-expectations reading usually pushes rates up, a reading
of 0.2% would calm deflationary fears and help keep rates flat.
FOMC Policy Announcement
3/18
Significant
With the debate intensifying over government management of this
recession, a statement regarded as weak could move rates upward.
Leading Economic Indicators
3/19 0.4% -0.3%
M-oderate
After two months of unexpected increases, a third month could add to the
hopes of economic recovery, but rates would feel upward pressure.
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