The recent economic headline drought is over - this week brings a tidal wave of news and headlines, all of which will very likely have an impact on where home loan rates will head next. Remember that strong economic reports that are laced with the scent of inflation will be bad for Bonds and home loan rates; while vice versa, weak economic reports will be good news for rates ahead. The week kicks off with a look at the housing market, via Existing Home Sales on Monday and New Home Sales on Tuesday. And before the week is over, we'll also get a read on Consumer Confidence and Consumer Sentiment, Personal Income and Spending, Construction Spending and several more...the list seems endless.
But although all these reports will be of interest, there are two main attractions coming this week...and the timing will be quite interesting. On Thursday afternoon, the Fed will wrap up their latest Monetary Policy Meetings, and issue their formal Statement and interest rate decision. There is virtually no chance of a rate change - but the wording of the Policy Statement will be analyzed down to its last vowel. Does the Fed really feel inflation is moderating as expected...or are they still concerned? We'll all find out Thursday - and here's where it gets really interesting. As fate would have it, the calendar just happens to bring the Fed's most favored gauge of inflation, the Core Personal Consumption Expenditure (PCE)...on Friday, the day after the Fed announcement.
So on Friday, will the Fed be eating their words, or feeling pretty smart that their Policy Statement verbiage lines up with the most recent read on inflation? We'll all know soon - so stay tuned for the results in the next Weekly newsletter!
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