inflation

Looking Back And Looking Ahead : June 30, 2008

June 30, 2008

Mortgage rates improved last week, marking the first time since mid-May that has happened. The rate drop is the result of how mortgage markets interpreted the Federal Reserve’s Wednesday press release. In it, the Fed said: Inflation pressures should lessen soon Growth should remain steady this year The credit market is currently fragile Separately, none […]

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How The Fed’s Words Should Trump The Fed’s Actions Today

June 25, 2008

The Federal Open Market Committee adjourns from its 2-day meeting at 2:15 P.M. ET today.  It’s widely expected that the group will leave the Fed Funds Rate unchanged at 2.000 percent. However, it’s not what the Fed does today that has markets so interested.  It’s what the Fed will say. One of the Federal Reserve’s […]

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Making English Out Of Fed-Speak (June 2008 Edition)

June 25, 2008

The Federal Open Market Committee left the Fed Funds Rate unchanged at 2.000 percent this afternoon, as expected. In its press release, the Federal Reserve noted the co-existence of inflation and recession. On inflation, the Fed said that energy and food prices are contributing to an “elevated state” of inflation, but that it expects price […]

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Looking Back And Looking Ahead : June 23, 2008

June 23, 2008

Mortgage rates edged higher for the fifth straight week and the benchmark 30-year fixed-rate mortgage is now at a 10-month high. One reason why rates are spiking is because the temporary jolt from higher energy and food costs is starting to look like a longer-term trend. For example, high energy prices get a lot of press, but […]

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The Midwest Flooding And Its Impact On Your Home Mortgage

June 20, 2008

Flooding in the Midwest has displaced thousands of families and caused billions of dollars in damages. It may also cause mortgage rates to rise. As the extent of the damage becomes more clear, prices for grain and livestock are soaring.  For example, a host of dietary staples are suddenly more expensive at the supermarket, including: Meat […]

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Looking Back And Looking Ahead : June 16, 2008

June 16, 2008

Mortgage rates moved higher last week on lingering concerns about inflation, the fourth straight week in which rates rose. Mortgage rates are now as high as they’ve been since October 2007. Because inflation devalues mortgage bonds, market players are quick to unload them when signs of inflation are present. Last week, there were several such signs: […]

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Is The Federal Reserve Telegraphing Its Next Rate Hike?

June 11, 2008

The Federal Reserve is stumping hard on inflation this week, creating speculation that Fed Funds Rate hikes may be in store for later this month. This is a counter-intuitive development because increases to the Fed Funds Rate are typically associated with periods of rapid economic expansion. Lately, we’ve seen anything but. Witness: High levels of unemployment […]

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Looking Back And Looking Ahead : June 9, 2008

June 9, 2008

There was no rest for the mortgage-rate weary last week. As mortgage bonds sold off early in the week, sharp rate hikes followed. A steady stream of better-than-expected economic reports had re-ignited inflation fears, drawing money from the bond market. On Friday, however, the money flow reversed on a triple threat to the U.S. economy: The […]

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Why It’s Good News For Home Buyers When Unemployment Rates Surge

June 6, 2008

On the first Friday of every month, the Bureau of Labor Statistics releases its Non-Farm Payrolls report. More commonly called the “jobs report”, today’s 2-page analysis of May 2008 shows that the economy shed jobs and that unemployment surged. This is terrific news for home affordability. That may sound counter-intuitive, so let’s dig deeper into the […]

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What Happens When Bernanke Says “Inflation” 55 Times In 5 Pages Of Text

June 5, 2008

Mortgage rates are a big deal when you’re buying a home. With even the slighest uptick in rates, 30 years of mortgage payments can get substantially more expensive and one of the most substantial threats to mortgage rates is an economic event called inflation. Inflation’s influence on mortgage rates is so large that markets can get jarred […]

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The Impact Of Falling Oil Prices On Mortgage Rates

May 30, 2008

Falling oil prices is one reason why mortgage rates are dropping for the first time in 6 days. Oil is off $9 per barrel from last week, a shift that correlates to $0.23 per gallon of unleaded gas, roughly. This drop is good news for both home buyers and “rate shoppers” — high gas prices […]

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Looking Back And Looking Ahead : May 27, 2008

May 27, 2008

The market optimism that had pushed mortgage rates lower since late-March reversed last week on ever-rising oil prices and a bleak outlook from the Federal Reserve. When gas prices reached $3.93 Friday, it re-ignited inflation concerns and inflation, you’ll remember, is the enemy of mortgage rates. As expected, mortgage rates spiked into Friday’s market close. […]

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How Spiking Oil Prices Have Mortgage Rates In Tow

May 23, 2008

High oil prices are derailing the mortgage market this week, taking an almost-vertical path higher. Since mid-February, prices are up by 50 percent. Rising oil prices can be a threat the U.S. economy because with every extra dollar that Americans pay to energy companies, there is less money available for every other company that makes […]

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Looking Back And Looking Ahead : May 19, 2008

May 19, 2008

Optimism ruled the markets last week — optimism about employment, optimism about housing, and optimism about inflation. Mortgage rates edged lower overall. Despite the positive sentiment from Wall Street, consumer confidence in the economy reached a 28-year low. This is a normal divergence because investors live in the “future” of markets while Americans live in the […]

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How The 84,000 Parts Of Inflation Impact Mortgage Rates

May 12, 2008

When the everyday “Cost of Living” increases, our dollars don’t go as far as they used to.  Economists call this inflation. One popular method of measuring inflation is to track prices for 84,000 individual items and lump them together into a “basket”.  If the overall price is higher, then the economy is experiencing inflation. If a […]

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Looking Back And Looking Ahead : May 12, 2008

May 12, 2008

With little economic news to influence trading and despite a late-Friday afternoon spike, mortgage rates edged lower last week. Two weeks ago, when it lowered the Fed Funds Rate by a quarter-percent, the Federal Reserve noted two things: The economy was stabilizing High energy costs threatened inflation In the days that followed, though, the U.S. dollar […]

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Why It Doesn’t Matter What The Federal Reserve Does Today

April 30, 2008

The Federal Open Market Committee adjourns from its two-day meeting at 2:15 P.M. ET today. Markets expect the Fed to lower the Fed Funds Rate by 0.250 percent in its press release but it’s not what the Fed does that matters to economy right now. It’s what the Fed says. If the Fed states that […]

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Making English Out Of Fed-Speak (April 2008 Edition)

April 30, 2008

The Fed lowered the Fed Funds Rate by a quarter-percent to 2.000% this afternoon. Because it is tied to the Fed Funds Rate, Prime Rate also fell by a quarter-percent.  Prime Rate is now 5.000%. Holders of home equity lines of credit and credit card debt benefited from the change and will see lower interest costs in next […]

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Looking Back And Looking Ahead : April 28, 2008

April 28, 2008

Mortgage markets lost ground last week on inflation concerns and a general feeling that “the worst may be over” on Wall Street. As investors moved money into the stock market, mortgage rates ticked higher for the second straight week. The biggest story from last week was the rising cost of gasoline. Rising energy costs combined with rising […]

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Looking Back And Looking Ahead : April 14, 2008

April 14, 2008

Through 5 days of see-saw trading, mortgage rates ended last week relatively flat; the downward tick into Friday’s close was a boon for home buyers this past weekend. It may be short-lived, however. Oil continues to sit near all-time highs and a slew of inflation-related data is crossing the wires this week. When inflation pressures are […]

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