The Fed minutes from the July meeting will be released at 2:00 p.m. ET this afternoon. There is speculation and fear the Fed discussed outright sales of Mortgage Backed Securities as they do not want them on their balance sheet. The Fed is set to shrink the balance sheet by $95B a month come September along with a 0.50% rate hike or more. Investors will see if the economy can support it and yields have topped out. We shall find out soon enough.
Mortgage rates were essentially unchanged in the MBA's latest survey and borrowing costs seem to be topping out near current levels. The 30-year fixed-rate mortgage fell to 5.45% from 5.47% with 0.57 points for the week ended August 12, 2022. Within the data, it showed that the Market Composite Index fell 2.3%, the Refinance Index lost 5% and the Purchase Index was down 1%. Spokesperson Joel Kan said, "If home price growth slows more significantly and mortgage rates move lower, we might see some purchase activity return later in the year."
July Retail Sales were unchanged from June as falling gas prices were offset by high prices for goods and services. Sales were up 10.1% from last year. Gasoline stations were up 39.9% from July 2021, while nonstore retailers were up 20.2% from a year ago. Retail and services together represent what’s commonly referred to as consumer spending.Two-thirds of all spending in the economy is by consumers.