Bonds Down on Sandra Pianalto’s Comments
27 March 2007
Current Mortgage Outlook: Float
Bonds were down today despite weaker than expected Consumer Confidence report.ﾃつ ﾃつ Still, retail mortgage rates may see an improvement of .125 point due to net improvements over yesterday.
March’s Consumer Confidence Index dropped this month, falling short of forecasts to 107.2.ﾃつ ﾃつ ﾃつ This demonstrates that consumers are less optomistic about their spending and financial situations than was forecasted.ﾃつ This is good news for mortgage rates.
We can blame the weakness in bonds this AM to a Fed member statement.ﾃつ Cleveland Fed President Sandra Pianalto made a comment today that inflation may not be moderating as quickly as expected.ﾃつ The statement affirms that the Fed may still be concerned about inflation risks and may be maintaining a conservative stance on interest rates, resisting dropping the Fed funds rate.
Tomorrow we will receive the Durable Goods Orders which demonstrates manufacturing strength.ﾃつ ﾃつ A strong showing on this report could be bad news for interest rates, a weak report would be good news.
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