We began last week with the market-bolstering news that Fannnie & Freddie could borrow at the Fed window if they needed to, and this gave mortgage rates a little boost (meaning they dropped). But by the end of last week, fears about inflation and a couple of negative economic reports took over the media space and mortgage rates closed the week generally up about .375 from where they began.
News You Can Use Tip - When Bond prices move higher, home loan rates move lower...and vice versa.
The bad economic news last week was that the Producer Price Index soared to it's highest year-over-year increase since 1981. Meanwhile, the Consumer Price Index rose to it's highest year-over-year level since 1991. The Retail Sales Report was negative too, indicating that retail sales didn't rise as much as forecasters expected. Seems those tax rebate checks aren't going so far after all.
This week Thursday and Friday are the big econ news days. On Thursday expect the Jobless Claims report and Existing Home Sales numbers for June. Friday brings the release of the Consumer Sentiment Index and New Home Sales numbers. Forecasters are predicting a little bump in the wrong direction for all these numbers. Me? I'm with 'em. I think we've got a few more months of bad news before we see the light at the end of the tunnel. The AP newswire backs that up.
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