![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week lower which put upward pressure on rates. Inflation fears were flamed in response to projections that rates will head higher into the first part of next year. However, Treasury Secretary Yellen indicated she sees tame inflation by the latter part of next year. Trading was volatile from day to day amid thin trading conditions surrounding the holiday. Existing home sales were 6.34M vs 6.18M. Weekly jobless claims were 190K vs 260K. GDP rose 2.1% vs 2.2%. Durable goods fell 0.5% vs the expected 0.2% increase. Income rose 0.5% vs 0.1%. Spending rose 1.3% vs 1%. PCE inflation rose 0.6% as expected. New home sales were 745K vs 815K. The minutes from the last Fed meeting indicated members are ready to raise rates if inflation escalates. Mortgage interest rates finished the week worse by approximately 1/4 to 3/8 of a discount point.
Looking Ahead
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| FHFA House Price Index | Tuesday, Nov. 30, 10:00 am, et |
Up 1.2% | Moderately Important. A measure of single-family house prices. Weakness may lead to lower rates. |
| Consumer Confidence | Tuesday, Nov. 30, 10:00 am, et |
110.5 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| ADP Employment | Wednesday, Dec. 1, 8:30 am, et |
480K | Important. An indication of employment. Weakness may bring lower rates. |
| Construction Spending | Wednesday, Dec. 1, 10:00 am, et |
Up 0.6% | Low importance. An indication of economic strength. Significant weakness may lead to lower rates. |
| Fed “Beige Book” | Wednesday, Dec. 1, 2:00 pm, et |
None | Important. This Fed report details current economic conditions across the US. Signs of weakness may lead to lower rates. |
| Weekly Jobless Claims | Thursday, Dec. 2, 8:30 am, et |
205K | Important. An indication of employment. Higher claims may result in lower rates. |
| Employment | Friday, Dec. 3, 8:30 am, et |
4.5%, Payrolls +563K |
Very important. An increase in unemployment or weakness in payrolls may bring lower rates. |
| Factory Orders | Friday, Dec. 3, 10:00 am, et |
Up 0.6% | Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.. |
Fed Beige Book
The Fed “Beige Book” is a summary of economic conditions from each of the 12 Federal Reserve regional districts. The release takes place eight times a year approximately two weeks ahead of each of the Federal Open Market Committee meetings. The report is used at the FOMC meetings, which tends to be one of the most influential events in the market.
Market participants are continually attempting to determine what FOMC interest rate policy will be ahead of the next meeting. Any deviation from expectations usually results in extreme short-term market volatility. The timing of the “Beige Book” provides analysts a valuable look at one of the many factors the FOMC considers in setting an interest rate policy. If the “Beige Book” shows signs of inflationary pressures, the Fed’s ability to keep rates lower may be somewhat restricted. However, if the report shows signs of difficulties, the Fed may keep rates low to stimulate the economy. Be cautious heading into this release.
