![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. Trading was within a very narrow range throughout most of the week. Some strength in the housing data mid-week resulted in a selloff Wednesday morning. The rest of the days were slightly positive as the Fed pivoted and made a 50 basis point cut. The data was mixed. Industrial production rose 0.8% vs 0.2%. Capacity use was 78% vs 77.9%. NAHB housing was 41 vs 40. Housing starts were 1.356M vs 1.31M. Weekly jobless claims were 219K vs 230K. The Philadelphia Fed report was 15.8 vs 15.4. Existing home sales were 3.86M vs 3.9M. LEI fell 0.2% vs the expected 0.3% decline. Mortgage interest rates finished the week with discount points near unchanged.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
|---|---|---|---|
| FHFA House Price Index | Tuesday, Sept. 24, 10:00 am, et | Up 0.4% | Moderately Important. A measure of single-family house prices. Weakness may lead to lower rates. |
| Consumer Confidence | Tuesday, Sept. 24, 10:00 am, et | 102.9 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| New Home Sales | Wednesday, Sept. 25, 10:00 am, et | 700K | Important. An indication of economic strength and credit demand. Weakness may lead to lower rates. |
| Durable Goods Orders | Thursday, Sept. 26, 8:30 am, et | Up 2.9% | Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates. |
| Q2 GDP | Thursday, Sept. 26, 8:30 am, et | Up 3% | Very important. The aggregate measure of US economic production. Weakness may lead to lower rates. |
| Weekly Jobless Claims | Thursday, Sept. 26, 8:30 am, et | 226K | Important. An indication of employment. Higher claims may result in lower rates. |
| Personal Income and Outlays | Friday, Sept. 27, 8:30 am, et | Up 0.3%, Up 0.4% | Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates. |
| PCE Core Inflation | Friday, Sept. 27, 8:30 am, et | Up 0.2% | Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve. |
| U of Michigan Consumer Sentiment | Friday, Sept. 27, 10:00 am, et | 69 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
PCE
The US Department of Commerce’s Bureau of Economic Analysis releases the core PCE price index. The report provides the average increase in costs for personal consumption expenditures. PCE is significant in that the Fed uses it in determining inflation as opposed to the prior use of the consumer price index. The PCE includes the price of spending for and on behalf of households. This includes health care spending paid for a household by a business. The CPI only reflects out of pocket expenses paid directly by consumers. The Fed continues to state that getting inflation in check is their primary concern.Be cautious heading into the release. Data can surprise the financial markets from time to time.
Mortgage interest rates will likely spike higher in the short term if the PCE core reading is higher than expected. A reading in line with expectations will likely help rates stay in check.
