Yesterday, the Federal Open Market Committee released their minutes from their two day meeting.
Bernanke and Company decided to hold the Fed Fund Rate at 2% though "Loose Lips" Fisher voted for a hike in the rate. Fisher has consistently over the last several meetings voted for a rate hike. He feels that inflation could be a problem in the near future.
The press release also stated that the committee feels that the financial markets and the tight credit conditions are causing stress and stunting the overall economic growth in our country. But with the changes in the Fed policy and the different measures put into place over this past year, economic growth should slowly take hold.
As to inflation overall, which does cause the mortgage interest rates to go up, the Fed is concerned about it but not concerned enough to indicate a Fed Fund Rate hike in the near future. This, of course, caused the stock market to surge at the end of the day and the bond market to drop. And mortgage interest rates did moved a bit higher.
And a little bit of important news to the FOMC, Elizabeth A. Duke was sworn into the committee this week and she voted in this week's meeting. Several of the FOMC members will either be retiring or their terms will be up so filling these seats are important. It is the President who nominates these members with Congress approving them.
Please feel free to contact me with your concerns about your mortgage needs. I am here to help you.
And make each day an inspired one!
Betsy Moore
206-331-2749
betsy@mooremortgagesolutions.com
This week and next week will be short weeks for the financial markets. The market will close early this Friday, 2PM ET and next Monday is Labor Day.
With the short week and several important economic reports being released over the next several days, we may be in for a bumpy ride on several of those days.
The first of the reports this week is the July’s Existing Sales. Those numbers released already came in a bit higher than June’s but lower than year to date. This report hasn’t affected the bond market which is trading in the positive territory at the moment.
The next report that could affect the market is the Federal Open Market Committee (FOMC) minutes. These are the minutes from their last meeting and where we see what each member said about the economy. Depending what was said, this report could move the market. This report will be released tomorrow.
The other two reports being released at the end of this week are the revised reading of the 2nd Quarter Gross Domestic Product (GDP) and the Personal Consumption Expenditures and its Core.
In the meantime, if you have any questions or would like to talk about your mortgage needs or concerns, please do not hesitate to contact me. I am here to help you work through the process.
Home of the Ready, Set, Go Program
Ah, quiet so far this week. But will it last?
Yesterday, the Core Producer Price Index came in much higher than expected which should have made money move out of the bond market. But the bond traders didn’t react. They felt with the Housing Stats falling by 11% in July and crude oil down for August, inflation should moderate some in August.
In other news, investors are watching for any tidbits to come from Fannie Mae and Freddie Mac. These two companies own or guarantee roughly half of all mortgages in the United States. They have been in the news a lot especially since the Housing and Recovery Act of 2008 along with their liquidity problems.
Tomorrow’s economic report is the Philadelphia Fed Index. This index reports regional manufacturing purchases for the present month. And it can affect the market.
In other news heard, Sacramento and Las Vegas look to have hit their bottom of their housing market and are seeing moderate increases in their housing prices. The question is whether this will hold and if so, will it spread to other parts of the country.
But please remember, the Seattle area hasn’t had the huge losses that these markets have had. Yes, we are down a bit but not to the extent of those markets. I is still a good time to buy in this market.
Please feel free to contact me with your mortgage concerns, questions about your mortgage or the market place. I am here to help you figure out what is best for your situation.
And please make each day an inspired one!
CMPS™
betsy@mooremortgagesolutons.com
Will this be a fairly quiet week? With only one economic report whose impact is consider most likely to affect the market, we may have a fairly quiet one. But with that said, anything can happen.
Tomorrow is the release of the July’s Producer Price Indexes (PPI) and these give us the inflation figures at the producer level. The more important one is the Core PPI as that stripes away the more volatile food and energy prices. The market is betting on a 0.2% increase and anything more than that could move the bond market into lower levels causing the mortgage rates to go up.
Remember, inflation is the big bad wolf of the bond market causing the bond market to go down. When the bond market goes down, interest rates go up.
Other reports being released this week are the Housing Stats and the Leading Economic Indicator both for July could impact the market if their figures are not what the market expects.
Stock prices could influence the market more than anything else this week. As always, I will be keeping an eye on it for you.
In the meantime, please feel free to contact me with your questions or concerns about your mortgage, purchasing a home, or whatever else you wish to discuss concerning the market.
Home of the Resdy, Set, Go Program
Did you buy a home this year? After April 9, 2008? Thinking about buying a home this year or next year? Before July 1, 2009?
These are important dates to remember for first time home buyers. A first time home buyer is classified as someone who hasn't owned in a home in the past three years.
Why are these dates, April 9, 2008 to July 1, 2009, so important?
In the Housing and Recovery Act of 2008 that was signed into law this past month, you may be eligible for the new tax so-called "refundable" credit. As a first time home buyer, you may be allowed to deduct up to 10% of the purchase price of your primary home not to exceed $7,500.
If you live in the Seattle area and have or are planning to purchase a home between these dates, that could mean a total "refundable" credit of $7,500 for you and your family.
This so-called "refundable" credit does have some interesting guidelines to it.
First, it is payable back to the Federal government. This is done over a 15 year period and works out to be a little over $500 per year on the full $7,500. This credit will be accelerated if the home ceases to be your primary residence or is sold.
Second, there is an income restriction for the full credit. For a single person, it is $75,000 and for jointed returns, it is $150,000. And yes, there is a phase out for higher income levels up to $95,000/$170,000 respectively.
Third, as always when dealing with taxes and especially new tax law, please talk to your CPA or tax person about this. This is one deduction you don't want to miss out on if you are allowed to take it. Also your CPA or tax person will be about to tell you about the new standard deduction for non-itemizers which has been increased by $500 for single/$1000 for joint returns for their property taxes.
This is a great time to purchase a home. Don't miss out on this opportunity to receive this "refundable" credit.
In the meantime, please feel free to contact me with your housing questions.
We are most likely in for another volatile week with some days more so than others.
The most important item on the agenda this week happens on Tuesday. The Federal Open Market Committee (FOMC) or what is commonly known as the Fed Meeting with Bernanke and Company will hold their scheduled meeting.
At the conclusion of this meeting (2:15PM EST), the FOMC will issue a statement. None of the economic pundits feel this meeting will result in a rate hike. But the bond traders and everyone else will be dissecting this statement for any indication of rate hikes and inflation or not. If the Fed indicates concerned about inflation then the bond market will act negatively. And likewise if the Fed isn’t, then the bond market should rally and mortgage rates will see a dip.
Other reports coming out that may affect the bond market will be June’s Personal Income and Outlays comes out prior to the Fed statement. This could move the market if we see sizable increases.
The June’s Factory Orders data and the Employee Productivity and Costs Data come out respectively on Tuesday and Friday. Unless there is significant movement in this data, neither should have an effect on the market.
There will be two auctions this week on Treasury notes-the 10-year Note and the 30-year Note. They will be held on Wednesday and Thursday. These will move the market only if there is lackluster interest from investors.
In the meantime, I am available to answer any questions on your mortgage, if this is a good time to buy or refinance a home. And don’t forget to check out my Ready, Set, Go program.
www.mooremortgagesolutions.com
GoGreen Mortgage
offering you
The Moore Mortgage Solution
Phone 206.331.2749 Fax 206.283.0989
email: betsy@mooremortgagesolutions.com
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