With the first FOMC minutes of the year, it sets the tone of the potential moves the Federal Reserve will make, with them remaining firm in their current stance of not employing any rate cuts, however given the more recent end of year reports, there is a likelihood that rate cuts will start this year. The last change in rates was in July of last year. The second most important report also being the final PMI (Manufacturing) numbers, which has largely met expectations without any irregularities.
S&P Global US Manufacturing PMI
Manufacturing PMI was revised lower to 47.9 in December 2023 from a preliminary of 48.2, and compared to 49.4 in November, pointing to a bigger deterioration in manufacturing conditions.
FOMC Minutes
According to the minutes, several officials said that the Fed might have to hold its benchmark rate steady “for longer than they currently anticipated,” while a number of officials pushed for some easing.
The dovish officials “highlighted the uncertainty associated with how long a restrictive monetary policy stance would need to be maintained, and pointed to the downside risks to the economy that would be associated with an overly restrictive stance,” according to the minutes.
Non-farm Payrolls
The unemployment rate was unchanged at 3.7% in December, the government said Friday, keeping it near a half century low.
Primary Mortgage Market Survey Index
• 15-Yr FRM rates seeing a week-to-week decrease by -0.04% with the current rate at 5.89%
• 30-Yr FRM rates seeing a week-to-week increase by 0.01% with the current rate at 6.62%
MND Rate Index
• 30-Yr FHA rates saw a 0.08% increase for this week. Current rates at 6.16%
• 30-Yr VA rates saw a 0.08% increase for this week. Current rates at 6.16%
Jobless Claims
Initial Claims were reported to be 202,000 compared to the expected claims of 220,000. The prior week was 216,000.
What’s Ahead
After the FOMC minutes for this week, next week will primarily be a light release week with one major report being the Consumer Price Index and Producer Price Index which will show the inflation rates over December.
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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.