Last week was light on economic reports included Consumer Price Index and Core index for September, the minutes of the FOMC meeting held earlier in September, and weekly reports on mortgage rates and new jobless claims.
Minutes of the Federal Open Market Committee meeting held in September suggest that while Fed policy makers have reservations about low inflation and labor markets, but it’s likely they’ll raise they’ll raise the target federal funds rate from its current range of 0.00 to 0.25 percent simply to take the anxiety off the table in financial markets. When the fed does raise rates, some analyst’ expect to see higher mortgage rates, as well as other loan products like personal loans and credit cards, but I think the price has already been built into market rate and we’ll see little movement.
Furthermore, FOMC members revealed they remain concerned about inflation and stagnant wages, and so they should!
September’s Core Consumer Price Index report showed a slight reduction as consumer prices fell by -0.20 percent, which matched analysts’ expectations and was lower than August’s reading of -0.10 percent. The reduction in consumer prices was caused by falling fuel prices. The Core Consumer Price Index for September, which does not include readings for energy or food prices, rose by -0.20 percent, and exceeded the predictions of an 0.10 percent increase and August’s reading of +0.10 percent.
Freddie Mac reported that fixed mortgage rates rose while rates for a 5/1 adjustable rate mortgage held steady last week. The average rate for a 30-year fixed rate mortgage rose by six basis points to 3.82 percent, while the average rate for a 15-year fixed rate mortgage rose by four basis points to 3.03 percent. The average rate for a 5/1 adjustable rate mortgage was unchanged at 2.88 percent. Average discount points were unchanged at 0.60 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.
New jobless claims fell to 255,000 against expectations of 270,000 and the prior week’ reading of 262,000 new claims. The four-week rolling average of new claims fell by 2250 new jobless claims and reached its lowest level since 1973.
In other jobs-related news, job openings fell from July’s reading of 5.70 million to 5.40 million in August. The Labor Department also reported that the hiring rate and quit rates held steady at 3.60 percent and 1.90 percent.
What’s Ahead for the Week?
This week’s we’ll get reports from The National Association of Home Builders Housing Market Index, September Housing Starts and Existing Home Sales and as usual weekly reports on mortgage rates and weekly jobless claims.
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