Last Week Of February Mortgage Chatter

The market seems to be comfortable, in the short-term, with rates where they are: the 10-yr around 3.80% and conforming conventional 30-yr ranging from 5.75-6.25, depending on if the borrower wants to pay or receive a rebate. (Mortgages are worse by about .125 this morning.) The only news out today – Existing Home Sales – is not expected to move rates, but there is quite a bit of news coming out later this week. Tomorrow we will see the Labor Department's Producer Price Index (PPI) for January. It measures inflationary pressures at the producer level of the economy, one of the reasons why rates are as high as they are: fears of inflation. It is expected to show an increase of 0.3% in the overall reading and a 0.2% rise in the core data. Also tomorrow morning is the release of February’s Consumer Confidence Index, expected to show a decline in confidence from 87.9 in January to 82.5 this month. Wednesday we’ll have Durable Goods, expected -4.0%, and then Thursday we have the first of two revisions to the 4th Quarter GDP. Old news? Perhaps. Analysts’ forecasts currently call for a 0.8% reading, indicating that the economy was a little stronger in the last quarter of the year than initially thought. Lastly, on Friday we have Personal Income & Consumption, and the University of Michigan’s Consumer Sentiment Survey. And besides all of that, we have two Treasury auctions for $38 billion to absorb this week, plus Bernanke's testimony on Wednesday.

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