Week in Review
With the passing of the Federal Open Market Committee rate decision panel, we now have definitively confirmed that the Federal Reserve intends to keep the rates at a two-decade high, for the sixth straight meeting by a unanimous vote. Jerome Powell had stated during the Q&A that they do not intend to cut rates until they have confidence that inflation will, “sustainably stay lower than the 2% objective.”
Lending partners have responded in kind by a rush in an increase of rates the last three weeks in a row, with expectations tempered about impending rate cuts any time soon. Markets across the board have experienced a cooling off as a result. Manufacturing has seen a slow trend downwards since the start of the year as reflected in the recent PMI and ISM data releases.
FOMC
Federal Open Market Committee voted unanimously to leave the benchmark rate unchanged in the target range of 5.25%-5.5%. Decision is unanimous for the 15th straight meeting.
Consumer Confidence
Consumer confidence fell in April for the third straight month and touched a 21-month low due to the high cost of food and gas and fresh worries about the jobs market. The consumer-confidence index sank to 97.0 this month from a revised 103.1 in March, the Conference Board said Tuesday. That’s the lowest level since July 2022.
Chicago PMI
The Chicago Business Barometer, also known as the Chicago PMI, dropped sharply to 37.9 in April. That is the lowest level since November 2022.
ISM
The Institute for Supply Management said Friday that its service-sector PMI dropped sharply to 49.4% in April from 51.4% in the prior month.
Primary Mortgage Market Survey Index
- 15-Yr FRM rates are seeing an increase by 0.03% with the current rate at 6.47%
- 30-Yr FRM rates are seeing an increase by 0.05% with the current rate at 7.22%
MND Rate Index
- 30-Yr FHA rates are seeing a -0.25% decrease for this week. Current rates at 6.70%
- 30-Yr VA rates are seeing a -0.24% decrease for this week. Current rates at 6.72%
Jobless Claims
Initial Claims were reported to be 208,000 compared to the expected claims of 212,000. The prior week landed at 207,000.
What’s Ahead
An extremely light week following the FOMC. The only expectation is weekly jobless claims data and consumer credit reports.
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.