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Mortgage News

Market Comment - Week of June 13th, 2011

Mortgage bond prices fell last week pushing mortgage interest rates slightly higher. There were large swings throughout the week. Rates were pressured higher Monday morning. Bonds rallied mid week following Fed Chairman Beneranke's comments about weakness in the economy which helped stabilize rates. Unfortunately strong stocks and a weak 30Y Treasury auction Thursday erased the improvements seen Wednesday. Mortgage bonds ended the week worse by about 1/8 of a discount point.

The inflation data this week will be significant. If inflation exceeds estimates on the consumer or producer side we could see a spike in mortgage interest rates. Tame inflation readings are always welcome.

Economic Factors

Economic Indicator

Release Date Time

Consensus Estimate


Retail Sales

Tuesday, June 14, 2011

Up 0.4%

Important. A measure of consumer demand. A smaller than expected increase may lead to lower mortgage rates.

Producer Price Index

Tuesday, June 14, 2011

Up 0.6%, Core up 0.2%

Important. An indication of inflationary pressures at the producer level. Lower figures may lead to lower rates.

Consumer Price Index

Wednesday, June 15, 2011

Up 0.4%, Core up 0.2%

Important. A measure of inflation at the consumer level. Lower than expected increases may lead to lower rates.

Industrial Production

Wednesday, June 15, 2011

Down 0.1%

Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.

Capacity Utilization

Wednesday, June 15, 2011


Important. A figure above 85% is viewed as inflationary. A decrease may lead to lower mortgage interest rates.

Weekly Jobless Claims

Thursday, June 16, 2011


Important. An indication of employment. Higher claims may result in lower rates.

Housing Starts

Thursday, June 16, 2011


Important. A measure of housing sector strength. Weakness may lead to lower rates.

U of Michigan Consumer Sentiment

Friday, June 17, 2011


Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.



Inflation fears tied to rising energy prices remain on the minds of traders. OPEC failed to raise production levels and many are preparing for large price spikes throughout the rest of this year as demand increases and supplies remain the same. Recent forecasts call for prices to skyrocket off the already high levels. That would be a disaster for the wobbly economy. The fate of mortgage interest rates in a scenario like that is even more uncertain. A US representative cautioned that the use of the US Strategic Petroleum Reserve might be necessary to "head off an economic collapse from continued high gas prices."

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Jason Keith
Senior Loan Officer

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Jason M. Keith
Senior Loan Officer
NMLSR # 288509
Cell: 303-263-6135

Starkey Mortgage

6025 S. Quebec Street

Suite 110

Centennial, CO 80111

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