Mortgage rates are more or less unchanged from Thursday’s levels.
Earlier today the Commerce Department released its latest reading on the Personal Consumption Expenditure price index. Also known as “PCE” it is the Fed’s favorite gauge of inflation because unlike the Consumer Price Index it allows for substitutions in the consumption basket (for example, if the price of beef rises consumers are more likely to purchase chicken).
The report showed that after stripping out volatile food and energy prices annual inflation stands at 1.4% which is well below the Fed’s target of 2.0%. US stocks love this news because it makes it more likely that the Fed will keep short-term rates for a longer period of time. Speaking of which, here is the latest forecast on when the Fed may begin to raise short-term rates:
In housing news the National Association of Realtors reported higher than expected pending home sales for February. One reason for stronger than expected results? Rents continue to increase across the country and people are finding it more affordable to purchase a home.
The economic calendar is busy this week. We get the monthly trio of jobs report starting on Wednesday and concluding on Friday. Friday is also Good Friday with the markets only open for a couple hours so I would not be surprised to see some volatility.
Current Outlook: locking bias