![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week near unchanged which held rates steady. Rates remained volatile with sharp up and down movements but fortunately we ended the week flat. A lot of tame data helped stem upward pressure on rates. Industrial production fell 0.5% vs the expected unchanged reading. Capacity use was 78.9% vs 79.5. Business inventories rose 0.2% as expected. Housing starts were 1434K vs 1475K. Existing home sales were 4.16M vs 4.25M. Leading economic indicators fell 0.7 vs down 0.6. Weekly jobless claims were 228K vs 240K. This unsettled trading a bit Thursday morning. The Philadelphia Fed business index was down 13.4 vs down 9.0. Mortgage interest rates still finished the week with discount points near unchanged despite significant volatility.
Looking Ahead
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| FHFA House Price Index | Tuesday, July 25, 10:00 am, et |
Up 0.2% | Moderately Important. A measure of single-family house prices. Weakness may lead to lower rates. |
| Consumer Confidence | Tuesday, July 25, 10:00 am, et |
111.5 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| New Home Sales | Wednesday, July 26, 10:00 am, et |
729K | Important. An indication of economic strength and credit demand. Weakness may lead to lower rates. |
| Fed Meeting Adjourns | Wednesday, July 26, 2:15 pm, et |
25 basis point hike | Important. Most expect the Fed to change rates, but some volatility may surround the adjournment of this meeting. |
| Q2 GDP | Thursday, July 27, 8:30 am, et |
Up 1.6% | Very important. The aggregate measure of US economic production. Weakness may lead to lower rates. |
| Durable Goods Orders | Thursday, July 27, 8:30 am, et |
Up 0.5% | Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates. |
| Personal Income and Outlays | Friday, July 28, 8:30 am, et |
Up 0.4%, Up 0.5% |
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates. |
| PCE Core Inflation | Friday, July 28, 8:30 am, et |
Up 0.2% | Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve. |
| Q2 Employment Cost Index | Friday, July 28, 8:30 am, et |
Up 1.1% | Very important. A measure of wage inflation. Weakness may lead to lower rates. |
Fed Hike
The Federal Open Market Committee meets this week and is expected to raise rates. The financial markets now expect a 25-basis point increase Wednesday. Inflation readings have recently shown signs of easing, but Fed officials want to see that trend continue. Fed Chair Powell has been clear that the Fed has more work to do tackling inflation. This week’s results are all but certain however what happens at the September meeting now comes into play. There is a lot of data between now and then but the comments from the Fed will provide some insight into their thinking.
Mortgage interest rates are likely to continue their up and down movements until inflation fears subside substantially. A cautious approach to float/lock decisions is prudent in this uncertain environment.
