consumer spending

The Week In Review (November 19, 2007) : What To Watch For

November 19, 2007

In a holiday-shortened week with no major economic data releases, expect worries about the credit markets and speculation about holiday shopping to take center stage. Last week was a mixed bag for the economy and mortgage markets responded in kind.  Rates were relatively unchanged. The news started with Wednesday’s Retail Sales report.  In showing a […]

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The Week In Review (November 13, 2007) : What To Watch For

November 13, 2007

The Dow Jones Industrial Average and NASDAQ shed 4.1% and 6.5%, respectively, last week. Normally, this would be good news for mortgage rates because investors tend to look for “safe havens” in bond issues, but instead, just treasuries benefited last week.  Mortgage bonds were left in the dust. Mortgage rates finished to the upside after […]

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Retail Sales Data Gives Mortgage Markets Something To Chew On

October 15, 2007

Until this morning, mortgage markets had been somewhat dormant over the course of the week.  There was no new data for traders to chew, digest and/or spit out.  Mortgage rates sat flat because of it. Then, at 8:30 A.M. ET, the Commerce Department released Retail Sales data for September.  Mortgage rates are headed higher this morning on […]

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Americans Will Spend $179 Million More On Gasoline Today Than One Year Ago

September 27, 2007

Economists worry about rising oil prices because it tends to generate higher pump prices for Americans.  With more money spent on gasoline, there’s (theoretically) less money available to spend on goods and services. Today, GasBuddy.com says that the average price for a gallon of unleaded gasoline is $2.792, up from $2.344 last year at this […]

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The Week In Review (September 10, 2007) : What To Watch For

September 10, 2007

Weak employment data pushed mortgage rates lower last week.  Against expectations of 110,000 new jobs created in August, last Friday’s Non-Farm Payrolls report showed a loss of 4,000 jobs. The story made headlines all over the country this weekend but its connection to mortgage rates is not always clear.  Here’s how the jobs report relates […]

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The Week In Review (September 4, 2007) : What To Watch For

September 4, 2007

Federal Reserve Chairman Ben Bernanke took the pulpit Friday in Jackson Hole but his remarks made little impact on mortgage bond trading. The Fed is aware of economic issues related to housing and mortgage debt, Bernanke said. He implied that the Fed wants more evidence that inflation has slowed before taking more drastic measures to help […]

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How Credit Cards May Be Replacing Home Equity As A Funding Source

August 29, 2007

As mortgage guidelines loosened between 2002 and 2006, homeowners often used their home equity to retire credit card and other consumer debt.  They did this by increasing the size of the mortgage and taking “cash out” from their home. As you’d expect, this type of mortgage transaction is called a “cash out” refinance. Well, now […]

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The Week In Review (August 27, 2007) : What To Watch For

August 27, 2007

This week is data-heavy so markets will finally get to focus on fundamentals instead of fear. For the past two weeks, uncertainty about the economy has led to psychologically-driven mortgage interest rate movements. Rising defaults devalue mortgage holdings and many investors are now expecting the defaults levels to rise even more. When defaults exceed expectations, […]

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The Fed Funds Rate Does Not Directly Impact Mortgage Rates

August 14, 2007

It’s been on the news a few times lately, so let’s address a key misconception about the Fed and its relationship to mortgage rates. The markets now anticipate that the Fed will lower the Fed Funds Rate within the next 45 days.  As a mortgage rate shopper, there’s not much reason to be interested.  That’s […]

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What Role Do You Play In This Rising Mortgage Rate Environment?

June 13, 2007

The American Consumer keeps spending. This morning, the monthly Retail Sales report showed a larger-than-expected jump.  Even after stripping out elevated gas prices, the sales increase was more than double the expected amount. The economy surges ahead, fueled by everyday spending, and this does not bode well for the future of mortgage rates. The recent […]

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The Five Words Spoken By Ben Bernanke That Rattled Mortgage Markets

June 6, 2007

Behold the power of the English language. With just five words, Federal Reserve Chairman Ben Bernanke rattled markets yesterday. In discussing how housing has slumped (and may continue to slump), Bernanke cited that weakness in the sector should not hold the rest of the economy back. This is departure from earlier this year.  In Q1, […]

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As Expected, Housing Drags Down Retail Sales

May 11, 2007

When consumer spending slips, it can send shockwaves through the economy.  Consumer spending, after all, makes up 70% of the economy. The best measure of consumer spending data is Retail Sales, a monthly figure describing how much money Americans are spending, and where they’re spending it. Retail Sales unexpectedly fell in April and that would […]

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Jobs Report Is The 800 Pound Gorilla In The Room

May 1, 2007

There’s a palpable uneasiness in mortgage markets right now and Friday’s payroll report looms large. Remember: it’s not the actual data that matters — it’s how close the data is to its expected levels. All week, traders have been jockeying for position based on a projected 100,000 new jobs created and if the number is […]

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The Week In Review (April 30, 2007) : What To Watch For

April 30, 2007

Last week, a ranking Fed official delivered a “wait-and-see” speech on inflation and that roiled the mortgage markets plenty. After sitting in a tight range for Monday through Wednesday, rates exploded higher Thursday as markets abruptly changed their expectations of growth for the rest of 2007. Despite weak housing numbers, employment and consumer spending figures […]

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How Consumer Spending Changes Mortgage Rates

April 17, 2007

If the data is correct, the U.S. consumers keep doing what they do best — consume. Despite weak consumer confidence surveys, retail sales posted a 0.7% gain, according to the U.S. Census Bureau.  This means that despite rising costs, Americans continue to fuel the economy. Speaking of fuel, a large reason for the unexpectedly large […]

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Bernanke Says Inflation Is “Somewhat Elevated”

March 29, 2007

Ben Bernanke delivered a prepared speech to the congressional Joint Economic Committee Wednesday in which he stated that inflation is “somewhat elevated”, but that it’s no reason to expect a Fed Funds Rate hike anytime soon. Some of Chairman Bernanke’s more salient points: Economic growth has slowed because of a “substantial correction” in the housing market […]

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More Americans Are Working And Are Being Paid More To Work

March 9, 2007

Mortgage rates are moving higher this morning after the 8:30 EST release of February’s jobs report. The 97,000 new jobs created was in-line with the 95,000 expectation, but January’s numbers were revised higher by 35,000 to 146,000. In addition, the report showed a slight drop in unemployment and an increase in average hourly earnings. If […]

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The Week In Review (February 26, 2007) : What To Watch For

February 26, 2007

Aside from CPI, last week was quiet on the economic data front.  Traders used the week to catch their breath and look around a bit at market conditions.  They liked what they saw and strong demand for bonds pushed mortgage rates down. This week, the big Market Mover Day is Thursday, coinciding with the release […]

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The Week In Review (February 5, 2007) : What To Watch For

February 5, 2007

Last week was not for the weak-hearted as mortgage rates bounced around like a fumbled Super Bowl football.  In a widely-expected move, the Federal Reserve held the Fed Funds Rate at 5.25% for the fifth consecutive meeting, stating that growth is “moderate” and that inflation pressures may be subsiding. Consumer spending represents two-thirds of the […]

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It Was “Happy Holidays” for Retailers in December

January 12, 2007

For all of the talk about the slowdown in consumer spending, it appears that this Holiday Season was a winner.  This morning’s Retail Sales report doubled economists’ expectations by showing 1.0% growth. This is just one more inflationary pressure in the economy and makes it less likely that the Fed will lower the Fed Funds […]

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