Last week’s light release schedule suggests that the Federal Reserve may be planning to cut rates this year, as most inflation data align with this expectation. This week, the only notable releases are the minor FOMC Minutes and the U.S. leading economic indicator index. While these indicators came in slightly worse than expected, the results are not significant enough to impact the upcoming rate decision.
U.S. Leading Indicators
The leading index for the economy fell 0.6% in July, the fifth straight monthly decline, the Conference Board said Monday. Economists polled by the Wall Street Journal had forecast a 0.4% decline.
FOMC Minutes
“Several” top Federal Reserve officials were ready to cut interest rates in July and most believed a reduction next month is justified in light of slowing inflation and a weakening jobs market, new documents show. “The majority overserved that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting,” the minutes of the Fed’s July 30-31 meeting said.
Primary Mortgage Market Survey Index
- 15-Yr FRM rates are seeing a decrease this week by -0.04% with the current rate at 5.62%
- 30-Yr FRM rates are seeing a decrease this week by -0.03% with the current rate at 6.46%
MND Rate Index
- 30-Yr FHA rates are seeing a -0.20% decrease for this week. Current rates at 5.90%
- 30-Yr VA rates are seeing a -0.20% decrease for this week. Current rates at 5.92%
Jobless Claims
Initial Claims were reported to be 232,000 compared to the expected claims of 230,000. The prior week landed at 228,000.
What’s Ahead
The Federal Reserve’s preferred inflation data report is heading up the pack with the PCI Index releasing at the tail end of the week, headed up by Personal Income and Consumer Confidence reports before that. The PCE Index data will be the strongest motivator for a soon-to-be rate cut.
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About the Author:
Babak Moghaddam graduated from University of Southern California in 1985. He entered the mortgage industry as a compliance auditor at the Bank of New York in 1986 and completed his masters in Business Administration two years later. After seventeen years in the traditional mortgage banking world Babak finally transformed this vision into his own practice in 2002 when he formed Charter Pacific Lending Corp, a mortgage company that has provided over $900 Million in residential real estate loans throughout Southern California. Babak and his team do things a little differently than other mortgage providers. They work as financial advisors, because they have come to realize that a mortgage is a very powerful financial tool. And just like any other financial tool, it should be managed as part of the overall financial management plan to reach every home owner’s long and short-term financial goals much faster. You can contact Babak for a free consultation and strategy session at (800) 322-1217 X103.