Incline Village Home Loans, Incline Village Mortgages, Incline Village Mortgage Rates and Incline Village Home Loan Rates:
WEDNESDAY AFTERNOON UPDATE:
This week’s FOMC meeting has adjourned with an announcement that the Fed trimmed their current bond buying program by another $10 billion per month. This move surprised few people as many analysts had been predicting the reduction at this meeting. The rest of the post-meeting statement more or less reaffirmed previous statements regarding economic benchmarks that the Fed would like to see. Generally speaking, the meeting results were basically uneventful.
Following the release of the statement at 2:00 PM ET, the bond market initially worsened but has since improved to near its best levels of the day. The stock markets have extended their earlier losses with the Dow down 172 points and the Nasdaq down 47 points. The bond market is currently up 18/32, which should be enough of a move to cause many lenders to improve rates by approximately .125 of a discount point over this morning’s pricing.
Tomorrow has two pieces of economic data worth watching, one of which is much more important and influential than the other. The big news will be the initial 4th quarter Gross Domestic Product (GDP) reading at 8:30 AM ET. It will be the first of three we will get for the 4th quarter. This data is so important because it is considered to be the best measurement of economic activity. The GDP itself is the total sum of all goods and services produced in the United States. Its results usually have a major impact on the financial markets and can cause significant changes in mortgage rates. This initial reading will be followed by two revisions, each released approximately one month apart. Last quarter’s first reading, which usually carries the most significance, is expected to show the economy grew at an annual rate of 3.0%. A noticeably weaker reading would be great news for the bond market, questioning the pace of economic growth. That would likely fuel more stock selling ! and a rally in bonds that should push mortgage rates lower tomorrow morning. However, a larger than expected increase, indicating the economy was stronger than thought, will likely fuel bond selling and lead to higher mortgage rates.
The second report of the morning is the weekly unemployment update from the Labor Department. They are expected to announce at 8:30 AM ET that 325,000 new claims for unemployment benefits were filed last week. That would be little change from the previous week’s 326,000 initial claims. The higher the number of new claims, the better the news it is for bonds and mortgage rates because rising claims hints at a softening employment sector. It is worth noting though, this data often has little effect on mortgage rates because it is a only a weekly snapshot and not a full month’s worth of data.
Also tomorrow are two relatively important Treasury auctions for the markets to digest. The Fed will auction 5-year and 7-year Treasury Notes tomorrow instead of over two days as they traditionally do. If the sales are met with a strong demand from investors, the broader bond market may improve during afternoon hours. If they draw a lackluster interest, they could lead to bond selling and higher mortgage rates mid-afternoon tomorrow.