Mortgage Rates Flat Despite Fed Funds Rate Increase

Mortgage interest rates were mostly flat on the week as the Fed increased the Fed Funds rate by 0.25% as expected after its FOMC meeting. The Fed mentioned that growth rates of household spending and business fixed investment have moderated from their strong fourth quarter levels. Markets expect two more rate hikes this year. Economic data was limited. Of note, February Existing Home Sales, the January FHFA Home Price Index, February Leading Economic Indicators, and February Durable Goods Orders were stronger than expected. Durable Goods Orders were up 8.9% year over year. February New Home Sales were in line with expectations and weekly jobless claims were slightly weaker than expected. The median sales price of a new home was $326,800, up 9.7% year over year. Trade war fears have increased as President Trump signed a presidential memorandum imposing $60 billion of import tariffs on China. If the tariffs are implemented there are fears of increased inflation and a global economic slowdown.

The Dow Jones Industrial Average is currently at 24,019, down over 900 points on the week. The crude oil spot price is currently at $65.33 per barrel, up over $3 per barrel on the week. The Dollar weakened versus the Yen and Euro on the week.

Next week look toward Tuesday’s Case-Shiller Home Price Index and Consumer Confidence Index, Wednesday’s final look at Q4 GDP, International Trade, and Pending Home Sales Index, and Thursday’s Jobless Claims, Personal Income and Outlays, Chicago Purchasing Managers Index, and Consumer Sentiment Index as potential market moving events.