Mortgage rates moved downward last week as fears of a weakening economy outweighed inflation fears. The biggest news of the week was the loss of another 62,000 jobs in June with unemployment holding steady. However, we did get some hopeful news with the ISM Manufacturing Index unexpectedly stepping above 50, indicating a very small amount of expansion in manufacturing. While rates did tick down, there is some concern about how long the Fed can stand pat before increasing interest rates, like the European Central Bank did last week. With the coming election, the pressure to keep rates low will be significant. If the Fed waits until after the election, and inflation creeps higher, the Fed could be forced to end the year with the start of a campaign of increasing rates.
This coming week is very light in terms of economic news to digest. If traders continue to focus more on the challenges in spurring economic growth, we could see mortgages tick downward a bit more. However, if inflation concerns return to the forefront, rates will go up.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment