It’s an important day for the markets as we will hear from the Federal Reserve later this afternoon and get their latest thoughts on U.S. monetary policy. As we await that announcement, mortgage rates are trending slightly lower after a disappointing Consumer Prices Index reading this morning. Read on for more details.
Market Outlook 12.11.17 from Total Mortgage on Vimeo.
Where are mortgage rates going?
Federal Reserve takes center stage
Today is a significant day for financial market participants as we’ve got the conclusion of the Federal Reserve’s Federal Open Market Committee meeting this afternoon.
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This morning we got some interesting data in the Consumer Prices Index, which showed that the core reading softened in November. Inflation is a key metric that the Fed looks at and the fact that it’s continuing to run lower than their target is something that FOMC officials will be talking about today.
The general consensus right now is that the disappointing reading this morning isn’t anywhere near enough to alter their decision to raise the federal funds rate today, but it could certainly influence their outlook on the economy.
Many analysts are saying that they wouldn’t be surprised if the written statement strikes a more cautious tone, instead of hyping up multiple rate hikes in 2018.
If we look at the yield on the 10-year Treasury note (the best market indicator of where mortgage rates are going), we can see that the CPI data this morning caused investors to soften their positions and retreat back into bonds, moving the 10-year yield lower by a couple basis points.
Mortgage rates typically move in the same direction as the 10-year yield so rates are improving at the moment.
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Rate/Float Recommendation
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It’s important to pay attention to what happens with the Fed this afternoon, but we still think that the prudent decision is for borrowers to act sooner rather than later as mortgage rates continue to look as though they will rise over the coming weeks and months.
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Today’s economic data:
FOMC Meeting Ends
- The meeting will end with a written statement at 2:00pm and a Janet Yellen press conference at 2:30pm
Consumer Price Index
- The consumer price index for November rose 0.4% from the previous month, putting the year on year increase at 2.2%. However, core CPI slowed in November from 1.8% to 1.7%. That’s the opposite of what Federal Reserve officials currently debating the future of monetary policy in the U.S. want to see.
EIA Petroleum Status Report
- 10:30am
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Notable events this week:
Monday:
- JOLTS
- 10-Yr Note Auction
Tuesday:
- FOMC Meeting Starts
- PPI-FD
Wednesday:
- Consumer Price Index
- EIA Petroleum Status Report
- FOMC Meeting Ends
Thursday:
- Jobless Claims
- Retail Sales
- Import and Export Prices
- Business Inventories
Friday:
- Empire State Mfg Survey
- Industrial Production
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from Total Mortgage Blog http://ift.tt/2iZLh8o
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