In This Issue
Last Week in Review: There was good news from the labor sector, while the European Central Bank played zone defense against deflation.
Forecast for the Week: A recipe for volatility is stirring up. _____________________________________________________________________________________________
Last Week in Review
"They always call him Mr. Touchdown." Rudy Vallee. While the U.S. posted some positive numbers on the economic scoreboard this week, Mario Draghi, president of the European Central Bank (ECB), called defensive plays to ward off deflation in the Eurozone.
Americans filing for first-time unemployment benefits fell to a five-month low, the Labor Department reported, signaling ongoing strength in the job market. Although this was the only U.S. report of the week, economic news headlines from around the world held investors' attention.
Across the Atlantic, the ECB announced additional measures to ward off deflation in the Eurozone, including near zero interest rates for bank lending and deposits. The ECB move followed a similar path taken by Japan in January to reboot its economy. Certainly, these plays will be topic for conversation when Federal Reserve Chair Janet Yellen and her team take a time out to gather for the March 15 and 16 meeting of the Federal Open Market Committee here at home. As the Fed weighs in on our economic recovery, further rate increases could put the U.S. at odds with other major currencies, hitting exports and manufacturing where it hurts.
For now, the economy is still scoring for low home loan rates. In fact, rates continue to hover in historic territory.
If you or someone you know has any questions about the housing market, current rates or home loan products, please don't hesitate to email or call me at michael.borodinsky@
Forecast for the Week
The two-day Federal Open Market Committee (FOMC) meeting coupled with a packed economic calendar stirs up a recipe for volatility.
- Tuesday kicks off a slew of economic data, including Retail Sales.
- Also on Tuesday, look for the Empire State Index, the first of two key manufacturing reports. The Philadelphia Fed Index follows on Thursday.
- Inflation news will be important to monitor, as there have been hints of inflation heating up in recent reports. On Tuesday the wholesale-measuring Producer Price Index will be released, while the Consumer Price Index releases Wednesday.
- On the housing front, look for the National Association of Home Builders Housing Market Index on Tuesday, followed by Housing Starts and Building Permits on Wednesday.
- Wednesday also brings the FOMC Monetary Policy Statement, which could be a market mover.
- Weekly Initial Jobless Claims will be released on Thursday, as usual.
- Finally, the Consumer Sentiment Index will cap off the week on Friday.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result.
By: Michael Borodinsky
Vice President/Regional Builder Branch Manager | Caliber Home Loans
Call Michael: 732-382-2654
Email Michael: Michael.Borodinsky@caliberhomeloans.com
Follow Michael on Twitter: @mikeborodinsky