![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week higher which put downward pressure on rates. Rates started the week steady, improved solidly Tuesday in response to weaker consumer data and finished with small improvements Thursday and Friday. Some of the data supported the argument the Fed should cut rates sooner rather than later. Consumer confidence was 98.3 vs 102.5. New home sales were 657K vs 680K. FHFA housing prices rose 0.4% vs 0.2%. GDP rose 2.3% as expected. Durable goods rose 3.1% vs 2%. Weekly jobless claims were 242K vs 221K. Core PCE inflation rose 0.3% as expected. Personal Income rose 0.9% vs 0.3%. Outlays were down 0.2% vs up 0.1%. Mortgage interest rates finished the week better by approximately 3/8 to 1/2 of a discount point.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
|---|---|---|---|
| ISM Index | Monday, March 3, 10:00 am, et | 50.8 | Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates. |
| Construction Spending | Monday, March 3, 10:00 am, et | Up 0.2% | Low importance. An indication of economic strength. Significant weakness may lead to lower rates. |
| ADP Employment | Wednesday, March 5, 8:30 am, et | 140K | Important. An indication of employment. Weakness may bring lower rates. |
| Factory Orders | Wednesday, March 5, 10:00 am, et | Up 1.5% | Important. A measure of manufacturing sector strength. Weakness may lead to lower rates. |
| Fed “Beige Book” | Wednesday, March 5, 2:00 pm, et | None | Important. This Fed report details current economic conditions across the US. Signs of weakness may lead to lower rates. |
| Trade Data | Thursday, March 6, 8:30 am, et | $99B deficit | Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates. |
| Weekly Jobless Claims | Thursday, March 6, 8:30 am, et | 340K | Important. An indication of employment. Higher claims may result in lower rates. |
| Q4 Productivity | Thursday, March 6, 8:30 am, et | Up 1.1% | Important. A measure of output per hour. Improvement may lead to lower mortgage rates. |
| Employment | Friday, March 7, 8:30 am, et | 4%, Payrolls +133K | Very important. An increase in unemployment or weakness in payrolls may bring 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. This week the summary will be released Wednesday afternoon.
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 interest rate policy.
