Weekly Market Update From The Cincinnati HomeTeam At REMAX Elite

Dated: 11/13/2018

Views: 252

PPI Inflation Jumps
Average 30-year fixed rate
Week of 11/09 ± 0.00
Week of 11/02 +0.05
Stocks (Weekly)
Dow: 25,412 +800
NASDAQ: 7,084 +75

While there was a wide range of economic news‚ it was a quiet week for mortgage rates. Reaction to the inflation data‚ the election results‚ and the Federal Reserve meeting was minimal‚ and mortgage rates ended the week with little change.
The one significant surprise was Friday’s inflation data. The Producer Price Index (PPI) focuses on the increase in prices of “intermediate” goods used by companies to produce finished products. In October‚ PPI was 2.9% higher than a year‚ up from an annual rate of increase of 2.6% last month and far above the consensus for a City:Reading&beds=0&baths=0&min=0&max=100000000&map=0&quick=1&submit=Search" title="Search Properties in Reading">Reading of just 2.5%.
While higher inflation is negative for mortgage rates‚ the PPI data is very volatile month to month‚ so investors placed little weight on October’s results. If a similar surge is seen in the less volatile Consumer Price Index (CPI) report released this week‚ the reaction likely will be much larger. 
The midterm election results were in line with the scenario anticipated by investors and had little impact on mortgage rates. With control of the House switching to the Democrats and the Senate being retained by the Republicans‚ investors expect that fewer major policy changes will be accomplished going forward. If this is the case‚ it may result in slower increases in government spending‚ which would reduce the amount of bond issuance needed to fund the budget deficit.
As expected‚ Thursday’s Fed meeting produced no increase in the federal funds rate and few changes in the language in the Fed statement. Fed officials emphasized sustained improvement in the labor market while noting that growth in business investment “has moderated” in recent months. The main point of debate about the appropriate pace of future rates hikes continues to center on whether to move quickly in response to the tightening labor market or to proceed more slowly and wait to see if it leads to a pickup in inflation. 
This week‚ the Consumer Price Index (CPI) will come out on Wednesday. CPI is a widely followed monthly inflation report that looks at the price change for goods and services. Retail Sales will be released on Thursday. Since consumer spending accounts for about 70% of all economic activity in the U.S.‚ the retail sales data is a key indicator of growth. Mortgage markets were closed Monday in observance of Veterans Day.
MON 11/12 TUE 11/13 WED 11/14 THU 11/15 FRI 11/16
    CPI Retail Sales Industrial Prod.

  The market commentary material provided is from a third party vendor‚ MBSQuoteline‚ and is not necessarily the opinions of the sender or the organization they represent. This information is intended for educational purposes only and should not be construed as investment and/or mortgage advice. Additionally‚ the material is deemed to be accurate and reliable‚ but there is no guarantee it is without error.  

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Kim Schieldknecht

Kim Schieldknecht have been active in real estate sales for 12 years working in the Cincinnati and surrounding areas. Kim is recognized as a Executive club sales producer and has creating the Cincinn....

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