Mortgage Rate Movements 7/13/04 -7/21/04

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DATE

Mortgage Rates Information

7/21/04

8:48 am Greenspan spoke and congress listened. What was stated was the still "measured" pace of raising interest rates (the standard recent .25% increases). When looking at the statement the fed seems clear that the current low mortgage rates will not be sustainable. This is because of , "deep-seated forces emerging as a consequence of prolonged monetary accommodation,'' . It appears with this statement that the fed believes it will raise rates soon and at a steady pace. Expect mortgage rates to increase after this statement get around and is digested by the market traders.

7/20/04

9:22 am The numbers are in - Permits for new home building were dramatically down today. This can severely slow the economy, since home building has been one of the main factors that have stabilized (the past few years) a weak economy. But mortgage rate traders will not adjust rates based on  this information. A more important item reflecting mortgage rates today is the federal reserve chairman's meeting with congress. This afternoon the fed will give his forecast about the future economic expected growth. This will be very telling about the way rates will be controlled by the fed in the near future.

7/19/04

10:37 am A variety of numbers on earnings are coming in today. Many large companies are having rather good quarters and some even are expected to merge or buy smaller companies. On this news the mortgage rates main indicator, the 10 year T-bill, is moving upwards on it's yield. However, at the same time, numbers are showing that production costs are rising as raw material and shipping prices increase. This mix bag of economic news is holding the market steady...FOR NOW.

7/18/04

Markets closed

7/17/04

Markets closed

7/16/04

10:44 am Today we get some interesting information for the mortgage rate traders to mull over. The Michigan consumer price index is out and consumer spending is low. Also, the core prices for the products only increased .3%. Half of the expected .6%. What will be the result? This gives amo to the fed to remain in the "measured" raising of rates. A majority of mortgage market watchers believe this "measured" imncreases in rates means mortgage rates will move very slow upwards. As long as inflation stays in check.

7/15/04

8:48 am Yesterday the markets took a minor tumble and mortgage rates did  not move much on that. It appears that today, as trading opens, they will stay at the same level as before. Even though indicators show that the rates should be low the fear in the market, making them stay up, is probably based on OPEC's upcoming meeting. They are prepared to increase production by 2%. This increase will reduce prices and therefore increase the possibility of inflation. As we all know, Inflation can destroy low mortgage rates and cause the fed to raise them at a fast pace.

7/14/04

10:43 am Retail sales declined a whopping 1.1 percent. This reflects the consumer, whom has been the only safe guard to prevent a recession, may be slowing down spending. The mortgage market had been relying on the strong economy predication in order to raise rates. But this data may reduce the bonds yield and lower the possibility of inflation. Mortgage rates may move down on this data but the consumer is fickle and the market may wait on more profit information from companies before major changes take affect in the mortgage rate market.

7/13/04

8:59 am Economic information was in early and it showed that is may the trade deficit was down by close to 2 billion. This will result in added strength to the dollar and strength in production numbers. What does it do for mortgage rates? Well it will begin to put pr4essure on the ten year T bill. As a result the yield on the bond will increase and most likely raise a recent low mortgage rate market. So be prepared for a minor jump in rates.

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