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Market
Comment
Mortgage bond prices finished the week near unchanged which kept rates in check.
The MBS market continued to trade within a relatively tight range. Rates worsened Monday, improved mid-week, and worsened Friday morning. The data showed weakness, and the Fed kept rates unchanged.
Retail sales fell 0.9% vs the expected 0.7% decline.
Production fell 0.2% vs up 0.1%. Capacity use was 77.4% vs 77%. NAHB housing was a weaker 32 vs 36. Housing starts were 1.256M vs 1.36M.
Philadelphia Fed manufacturing fell 4.0 vs the expected 1.0 decline. LEI was down 0.1% as expected. Mortgage interest rates finished the week with discount points near unchanged.
LOOKING
AHEAD
|
Economic
Indicator |
Release
Date &
Time |
Consensus
Estimate |
Analysis
|
| Existing Home Sales |
Monday, June 23,
10:00 am, et
|
3.95M
|
Low importance. An indication of mortgage credit demand. Significant weakness may lead to lower rates.
|
| FHFA House Price Index |
Tuesday, June 24,
10:00 am, et
|
Up 0.1%
|
Moderately Important. A measure of single-family house prices. Weakness may lead to lower rates.
|
| Consumer Confidence |
Tuesday, June 24,
10:00 am, et
|
99.1
|
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
|
| New Home Sales |
Wednesday, June 25,
10:00 am, et
|
710K
|
Important. An indication of economic strength and credit demand. Weakness may lead to lower rates.
|
| Durable Goods Orders |
Thursday, June 26,
8:30 am, et
|
Up
6.8%
|
Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates.
|
| Q1 GDP |
Thursday, June 26,
8:30 am, et
|
Down
0.1%
|
Very important. The aggregate measure of US economic production. Weakness may lead to lower rates.
|
| Personal Income and Outlays |
Friday, June 27,
8:30 am, et
|
Up
0.3%
Up 0.2%
|
A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates.
|
| PCE Core Inflation |
Friday, June 27,
8:30 am, et
|
Up
0.1%
|
Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve.
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Fed Testimony
The Fed Chair delivers the 2nd installment of the Federal Reserve’s semiannual report on monetary policy, familiarly called the Humphrey-Hawkins report, to both the House and Senate Banking Committees this week. The House testimony will start Tuesday and will be repeated Wednesday in the Senate.
The report is one of the most important speeches given by the Fed Chair 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 Chair Powell speaks. Exactly what rates will do is unknown, even to Powell. Therefore, a cautious approach to rate decisions is prudent surrounding this event.
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