Grab your boots & hats for the Fed Meeting in the Cowboy State

Looks like things have settled down for rates as they remained relatively flat last week, according to the latest weekly survey published by Freddie Mac. What’s not remaining flat is home sales as a report already released this week shows home sales beating expectations!

This week, however, we have even more housing data coming out as well as some important inflation data. In addition to all of that, the Fed begins its annual Jackson Hole Economic Symposium on Thursday. 

There will be a great deal of market moving news likely to come out of this week’s Fed meetings in Wyoming, especially around when the Fed may taper its bond buying, which is helping rates stay low. The anticipation leading up to the meetings is likely to keep markets moving in a sideways pattern; but if any surprises are revealed we could see some increased volatility.

On Monday we saw the numbers on Existing Home Sales. Sales, at a 5.860 million annual rate, moved higher in June to end four prior months of slowing. Even though the consensus for July was a small step backward to 5.830 million, actual sales beat expectations coming in at 5.99 million.

As for New Home Sales, it’s been a wild ride! From January’s peak of 993,000 to June’s 6.6 percent monthly drop extending a downward trend, forecasters expected the trend to move higher. However, they didn’t foresee the outsized move higher to July’s actual of 708,000! 

Next up is the latest report on second-quarter GDP predicted slightly higher at 6.6 percent growth versus the first estimate’s 6.5 percent. 

Lastly on Friday we get a look at the Fed’s favorite inflation index, the PCE. Inflation has been sharp but is expected to moderate, at a 0.3 percent monthly gain for the core for a 3.6 percent annual rate; these would compare with 0.4 and 3.5 percent in June. Experts say this inflation is only temporary, but we’ll have to wait and see. 

As for this week’s trend for rates, we’ll be watching the 10-year Treasury yield for clues as to the direction rates may be moving. If the 10-year yield percentage moves up to 1.29 or 1.37, we could see rates bump higher but if it drops to 1.23 and lower we could see rates trend lower. 

Regardless, rates remain very favorable, so if you are looking to refinance out of mortgage insurance or save on interest, you’ve got to reach out to me now…either reply to this email to set up a call or call/text me at 818.307.6072.