Monday Mortgage Minute
It appears that the Federal Reserve may have made the correct call in not beginning to taper QE3 at its last meeting. September’s employment report, released last week, revealed fewer-than-expected new jobs. Mortgage rates responded as expected, and moved downward on the news.
Mortgage rates may be looking for a reason to slide even further downward this week, with many experts predicting that the government’s shutdown may have trimmed as much as a half a percentage point off of our GDP. Traders will have more data than usual to digest this week with many reports due. These include Industrial Production, Retail Sales, both Producer and Consumer Price Indices, and the ISM Manufacturing Index. Additionally, the Fed meets again this week, and will attempt to keep markets calm and assess what needs to be done to rev the economy up. If the Fed hints that it believes that the economy is losing steam, we could see rates trending even further downward. However, if the Fed points more clearly to a tapering of QE3, rates could even move upward.
(courtesy of Joe Massey, Castle & Cooke Mortgage)