![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week sharply lower which put significant upward pressure on rates. Rates worsened almost every day of the week. Fed Chair Powell signaled caution on future rate cuts and said they do not have to be “in a hurry.” The data was mixed. Consumer prices rose 0.2% and the core rose 0.3%. Both components were as expected. Producer prices rose 0.2% and the core rose 0.3%, both as expected. YOY PPI rose 2.4% vs 2.3%. YOY Core CPI rose 3.1% vs 3%. Inflation fell for six straight months before the most recent increase. Retail sales rose 0.4% vs 0.3%. Industrial production fell 0.4% as expected. Capacity use was 77.1% vs 77.2%. Mortgage interest rates finished the week worse by over a full discount point.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
|---|---|---|---|
| NAHB Housing Index | Monday, Nov. 18, 10:00 am, et | 44 | Moderately Important. A measure of single-family housing. Weakness may lead to lower mortgage rates. |
| Housing Starts | Tuesday, Nov. 19, 8:30 am, et | 1.34M | Important. A measure of housing sector strength. Weakness may lead to lower rates. |
| 20-year Treasury Bond Auction | Wednesday, Nov. 20, 1:15 pm, et | None | Important. Bonds will be auctioned. Strong demand may lead to lower mortgage rates. |
| Weekly Jobless Claims | Thursday, Nov. 21, 8:30 am, et | 222K | Important. An indication of employment. Higher claims may result in lower rates. |
| Philadelphia Fed Survey | Thursday, Nov. 21, 10:00 am, et | 7 | Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates. |
| Existing Home Sales | Thursday, Nov. 21, 10:00 am, et | 3.88M | Low importance. An indication of mortgage credit demand. Significant weakness may lead to lower rates. |
| Leading Economic Indicators | Thursday, Nov. 21, 10:00 am, et | Down 0.3% | Important. An indication of future economic activity. Weakness may lead to lower rates. |
| U of Michigan Consumer Sentiment | Friday, Nov. 22, 10:00 am, et | 73 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
Philadelphia Fed
Federal Reserve Banks were created to control the central banking system of the United States. The banks are divided into 12 districts and facilitate the monetary system by moving currency in and out of circulation in accordance with the policies set by the Federal Open Market Committee. The Reserve Banks handle check processing, hold cash reserves, and make loans to depository institutions. Each Reserve Bank regulates commercial banks in their district. The twelve districts include Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco. The Philadelphia Fed report is a survey of manufacturing businesses in the Northeast region.
The report is valuable due to the timing. It is released before the month is over and is the second regional report released. While there are many other regional reports throughout the month the Philadelphia Fed report is considered the most valuable. It has historically shown strong correlation with purchasing managers index data and therefore analysts give it considerable attention.
