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Market Comment
Mortgage bond prices finished the week near unchanged to slightly lower. Some mortgage rate programs stayed flat but others saw rate increases. The data this week was mixed. Core producer and consumer inflation data came in slightly higher than expected. Inflation, real or perceived, is generally not good for fixed income securities such as mortgage bonds. Weekly jobless claims came in @ 362k versus the expected 358k mark. The higher than expected claims helped counterbalance the inflation data. Leading economic indicators and Philadelphia Fed data also came in lower than expected. Most rates finished the week unchanged to 1/8 of a discount point higher.
LOOKING AHEAD
|
Economic
Indicator
|
Release
Date & Time
|
Consensus
Estimate
|
Analysis
|
| New Home Sales |
Tuesday, Feb. 26,
10:00 am, et
|
372k
|
Important. An indication of economic strength and credit demand. Weakness may lead to lower rates. |
| Consumer Confidence |
Tuesday, Feb. 26,
10:00 am, et
|
57.8 |
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| Durable Goods Orders |
Wednesday, Feb. 27,
8:30 am, et
|
Up 0.5%
|
Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates. |
| Weekly Jobless Claims |
Thursday, Feb. 28,
8:30 am, et
|
368k
|
Important. An indication of employment. Higher claims may result in lower rates. |
| Q4 GDP 2nd revision |
Thursday, Feb. 28,
8:30 am, et |
Up 0.1% |
Moderately Important. The aggregate measure of US economic production. Weakness may lead to lower rates. |
| Personal Income and Outlays |
Friday, March 1,
8:30 am, et |
Up 0.8%,
Up 0.2% |
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates. |
| PCE Core Inflation |
Friday, March 1,
8:30 am, et |
Up 0.1% |
Important. A measure of price increases for personal consumption. Weaker figure may help rates improve. |
| Consumer Sentiment |
Friday, March 1,
10:00 am, et |
74.5 |
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| ISM Index |
Friday, March 1,
10:00 am, et |
52.5 |
Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates. |
Fed Chairman Testimony
The Fed Chairman delivers the Federal Reserve’s semiannual report on monetary policy, familiarly called the Humphrey-Hawkins report, to both the House and Senate Banking Committees in February and July. The report is one of the most important speeches given by the Fed Chairman and was originally mandated by the Full Employment and Balanced Growth Act. The remarks made to each committee tend to be identical in nature and address basic economic principles. The areas addressed tend to be the overall state of the US economy, recent developments, economic fundamentals, foreign developments, economic outlook, ranges for growth, and concluding remarks. Senator Hubert Humphrey and Representative Augustus Hawkins originally sponsored the legislation in 1977.
There is a potential for market volatility anytime Fed Chairman Bernanke speaks. The testimony starts Tuesday morning and continues Wednesday. Exactly what rates will do is unknown, even to Bernanke. Therefore a cautious approach to lock decisions is necessary heading into this event.
Dana Bain Premiere Mortgage Services Inc. www.BainMortgage.com 978-422-2311 or 800-480-0545
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