economy

Whichever Way The Winds Blows

April 18, 2007

Up and down.  Up and down.  Up and down. It’s been a veritable roller coaster over the past two weeks for mortgage rates, mostly because traders can’t find the answer to the most important question facing mortgage markets: Are in the midst of inflation, or not? Everytime we see strong data in one sector of […]

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How Consumer Spending Changes Mortgage Rates

April 17, 2007

If the data is correct, the U.S. consumers keep doing what they do best — consume. Despite weak consumer confidence surveys, retail sales posted a 0.7% gain, according to the U.S. Census Bureau.  This means that despite rising costs, Americans continue to fuel the economy. Speaking of fuel, a large reason for the unexpectedly large […]

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Markets Turned Quickly And Left Rate Shoppers In Their Wake

April 12, 2007

So, just how quickly have the markets turned? According to Fed Futures Trading as watched by the Cleveland Federal Reserve, on March 13, it was as likely that the August Fed Funds Rate level would be 5.250% as it would be 5.000%. In other words, markets were betting with equal odds that the Fed would […]

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Three Fed Speakers On Tap For Today

April 10, 2007

With three members of the Federal Reserve scheduled to speak today, don’t be surprised if mortgage rates show some brief volatility. Despite weakness in housing, the economy has shown resiliency and continues to push forward.  Markets had widely expected a slowdown, but are now having to change course — rapidly.  T his is why mortgage […]

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The Week In Review (April 9, 2007) : What To Watch For

April 9, 2007

On strength in jobs and hiring, mortgage rates finished last week at their highest levels in six weeks. It was a slow week last week until Friday when — with the stock market closed for Good Friday and with most bond traders on early vacation — the Non-Farms Payroll report handily beat expectations. This created […]

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Good Friday + Jobs Report Data = Major Mortgage Rates Movement

April 6, 2007

Today’s mortgage rates are getting slammed on the heels of the Non-Farm Payrolls report.  Instead of hitting the consensus estimate figure of 135,000 jobs, the report showed a very large 180,000 new jobs created in March. Unemployment levels dropped to 4.4% pointing to underlying strength in the economy. Mortgage bonds are selling off right now […]

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The Domino Effect of Sub-Prime Lending on Move-Up Home Buyers

April 4, 2007

Wondering how the dramatic change in sub-prime mortgage lending will impact you? Try this stat on for size: Since 1998, 1.4 million families have used sub-prime mortgages to buy their first home. As sub-prime lending guidelines get tighter, there will be fewer first-time home buyers and that impacts every homeowner in the country. The reason […]

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The Week In Review (April 2, 2007) : What To Watch For

April 2, 2007

Last week, Ben Bernanke’s testimony before Congress served as a stark wake-up call that inflation is not going away so easily. Later in the week, hard data backed that up.  PCE, the Fed’s favorite inflation gauge, beat expectations and pushed the year-over-year increase to 2.4%. The Fed hopes that PCE will be 2.0% by 2008 […]

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Watch What I Do, Not What I Say I’ll Do

March 30, 2007

The University of Michigan Consumer Sentiment Survey slipped to 88.4 in March, down from February’s 91.3 and its lowest level in six months. Why should you care about the UofM survey?  In a nutshell, you shouldn’t.  But, you sort of have to. Here’s why: Consumer confidence is considered important by markets because hundreds of “real […]

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Bernanke Says Inflation Is “Somewhat Elevated”

March 29, 2007

Ben Bernanke delivered a prepared speech to the congressional Joint Economic Committee Wednesday in which he stated that inflation is “somewhat elevated”, but that it’s no reason to expect a Fed Funds Rate hike anytime soon. Some of Chairman Bernanke’s more salient points: Economic growth has slowed because of a “substantial correction” in the housing market […]

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The Week In Review (March 19, 2007) : What To Watch For

March 19, 2007

Sub-prime mortgage news dominated the headlines this past week as the Chicken Littles were out in full force.  Perhaps the fears of a credit crunch are overblown, but then again, perhaps there’s reason to worry. Like everything else in the world of economics, it all comes down to expectations. Markets makes predictions about the future […]

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Conforming ARMs Are Going Delinquent More Rapidly Than Sub-Prime ARMs

March 14, 2007

The Mortgage Bankers Association released a report yesterday detailing how mortgage-holding homeowners are meeting their obligations. The statistics were a major factor in the Wall Street sell-off yesterday as investors increasingly grow nervous that sub-prime mortgage defaults will spill over into other credit markets and take the economy with it. The report stated that fourth […]

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The Week In Review (March 5, 2007) : What To Watch For

March 5, 2007

Two weeks ago, the tone on Wall Street was overwhelmingly positive and the glass was half-full.  Last week, however, that all changed. The week began with former Fed Chairman Alan Greenspan’s remarking that a 2007 recession may be looming, and it ended with Dow posting its worst one week loss in more than four years. […]

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Fed President Poole Says “There Could Be A Recession”

March 2, 2007

Speaking in Chile this morning, St. Louis Fed President William Poole said that while “there could be a recession” in the coming months, the Fed is not expecting it. This echoes Ben Bernanke’s speech earlier this week in which he stated that the U.S. economy still has room for growth. Poole’s comments are soothing markets […]

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How Iran’s Uranium Enrichment Program Changes Mortgage Rates

February 23, 2007

In defiance of the UN Security Council, Iran is taking another step towards successfully building a nuclear weapon. Yesterday, it was reported by the International Atomic Energy Agency that Iran expanded its ability to create nuclear weapons and that it plans to “turn on” at least 1,000 uranium-enrichment centrifuges. Internationally, this decision creates questions (and fears) about […]

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The Week In Review (February 12, 2007) : What To Watch For

February 12, 2007

Despite the dearth of economic news last week, mortgage rates staged somewhat of a rally.  By the time the week ended. mortgage rates had retreated by half of the prior week’s major run-up.  The week was not without fireworks, however.  In prepared remarks, Dallas Fed President Fisher dropped a hint about future Fed rate hikes […]

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Plosser Tells Philadelphia: Rates May Need To Increase

February 7, 2007

Last week, the Federal Open Market Committee held the Fed Funds Rate at its current level and indicated that the economy is expanding at an acceptable pace.  This morning, however, a Federal Reserve Bank President delivered a public speech to the contrary. In prepared remarks to the local Chamber of Commerce, Philadelphia Federal Reserve Bank […]

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The Week In Review (February 5, 2007) : What To Watch For

February 5, 2007

Last week was not for the weak-hearted as mortgage rates bounced around like a fumbled Super Bowl football.  In a widely-expected move, the Federal Reserve held the Fed Funds Rate at 5.25% for the fifth consecutive meeting, stating that growth is “moderate” and that inflation pressures may be subsiding. Consumer spending represents two-thirds of the […]

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Upward Revisions Keeps Weak Job Data From Moving Rates

February 2, 2007

This morning’s Non-Farm Payrolls report showed that 111,000 new jobs were created in January, short of Wall Street’s 155,000 expectations.  The weaker-than-expected figure did not give mortgage markets a reason to rally, however, because December’s figures were revised higher by 39,000 and November’s by 42,000. Traders have shrugged off the data for three major reasons: […]

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It’s Not What They Do, It’s What They Say

January 31, 2007

It’s all eyes on the Fed today as the market sits patiently, waiting for the 2:15 P.M. EST press release.  Despite strong 2006 Q4 growth figures and a five percent spike in oil prices yesterday, there is an eerie calm while markets wait for the FOMC’s press release. In its December 2006 press release, the […]

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