The prior week showed a surprising display of inflation, in that for consumers, it was less than expected. This is giving way to some optimism that inflation is on the right track to being under control.
On the other end of the spectrum, for producers, inflation had shown to be slightly higher than expected. But the far higher impact of the two reports is the Consumer Price Index.
The Federal Reserve had still stuck to their stance as from the last FOMC opting to withhold any rate reduction decisions until late in the year, but the data coming in largely on a positive note has changed the previously highly negative outlooks into a neutral stance.
Consumer Price Index
The cost of consumer goods and services rose 0.3% in April, largely because of higher oil prices and housing costs, as inflation remained elevated in key parts of the economy. Yet the increase in the consumer price index last month fell below the 0.4% forecast of economists polled by The Wall Street Journal.
Producer Price Index
U.S. wholesale prices jumped 0.5% in April in another sign of sticky inflation. Economists polled by the Wall Street Journal had forecast a smaller 0.3% increase in the producer price index.
Primary Mortgage Market Survey Index
- 15-Yr FRM rates are seeing a decrease by -0.10% with the current rate at 6.28%
- 30-Yr FRM rates are seeing a decrease by -0.07% with the current rate at 7.02%
MND Rate Index
- 30-Yr FHA rates are seeing no change for this week. Current rates at 6.62%
- 30-Yr VA rates are seeing no change for this week. Current rates at 6.64%
Jobless Claims
Initial Claims were reported to be 231,000 compared to the expected claims of 214,000. The prior week landed at 208,000.
What’s Ahead
Extremely light week ahead after the inflation data releases. Heading up the most influential releases, the FOMC minutes will be highlighting potential plans for the future of rate decisions, among the regular job data releases.
MAY
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.