![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. Rates worsened significantly the beginning of the week amid continued inflation fears. Trading reversed with some flight to safety buying of US debt instruments following the Russian invasion of Ukraine. Oil prices pushed past $100 per barrel. The data was overshadowed a bit by the global developments. FHFA housing rose 1.2% as expected. Consumer Confidence was 110.5 vs 108. Q4 GDP rose 7% as expected. Weekly jobless claims were 232K vs 235K. New home sales were 800K as expected. Durable goods orders rose 1.6% vs 0.8%. Core PCE inflation rose 0.6% vs 0.5%. Income was unchanged vs an expected 0.3% decline. Spending rose 2.1% vs 1.6%. Mortgage interest rates finished the week worse by approximately 1/8 to 1/4 of a discount point.
Looking Ahead
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| ISM Index | Tuesday, March 1, 10:00 am, et |
58.0 | Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates. |
| Construction Spending | Tuesday, March 1, 10:00 am, et |
Up 0.4% | Low importance. An indication of economic strength. Significant weakness may lead to lower rates. |
| ADP Employment | Wednesday, March 2, 8:30 am, et |
323K | Important. An indication of employment. Weakness may bring lower rates. |
| Weekly Jobless Claims | Thursday, March 3, 8:30 am, et |
242K | Important. An indication of employment. Higher claims may result in lower rates. |
| Revised Q4 Productivity | Thursday, March 3, 8:30 am, et |
Up 6.5% | Important. A measure of output per hour. Improvement may lead to lower mortgage rates. |
| Factory Orders | Thursday, March 3, 10:00 am, et |
Up 0.5% | Important. A measure of manufacturing sector strength. Weakness may lead to lower rates. |
| Employment | Friday, March 4, 8:30 am, et |
3.9%, Payrolls +381K |
Very important. An increase in unemployment or weakness in payrolls may bring lower rates. |
Monetary Policy Report
The Fed’s report to Congress indicated, “The FOMC has continued to keep the target range for the federal funds rate at 0 to ¼ percent since the previous Monetary Policy Report. With inflation well above the Committee’s 2 percent longer-run goal and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate.”
“The economic projections provided by the members of the Board of Governors and the presidents of the Federal Reserve Banks inform discussions of monetary policy among policymakers and can aid public understanding of the basis for policy actions. Considerable uncertainty attends these projections, however. The economic and statistical models and relationships used to help produce economic forecasts are necessarily imperfect descriptions of the real world, and the future path of the economy can be affected by myriad unforeseen developments and events. Thus, in setting the stance of monetary policy, participants consider not only what appears to be the most likely economic outcome as embodied in their projections, but also the range of alternative possibilities, the likelihood of their occurring, and the potential costs to the economy should they occur.”
Taking advantage of historically favorable rates is prudent amid so much “uncertainty.”
