Rates Flat as Fed Leaves Fed Funds Rate Unchanged

Mortgage interest rates were mostly flat on the week as the Fed left the Fed Funds rate unchanged after its FOMC meeting. The Fed will begin reducing its balance sheet in October by $10 billion per month. There is also increased expectation that the Fed will increase the Fed Funds rate at its December FOMC meeting. Economic data was mostly stronger than expected. Economic data stronger than expected included August Housing Starts and Building Permits, August Import and Export Prices, weekly jobless claims, the September Philadelphia Fed Business Index, and August Leading Economic Indicators. Economic data weaker than expected included the NAHB Housing Market Index, August Existing Home Sales, and the July FHFA Home Price Index. Geopolitical tensions with North Korea have increased due to increased sanctions. North Korea is considering testing a hydrogen bomb over the Pacific.

The Dow Jones Industrial Average is currently at 22,333, up over 60 points on the week. The crude oil spot price is currently at $50.58 per barrel, up slightly on the week. The Dollar weakened versus the Euro and strengthened versus the Yen on the week.

Next week look toward Tuesday’s Case-Shiller Home Price Index, New Home Sales, and Consumer Confidence, Wednesday’s Durable Goods Orders and Pending Home Sales, Thursday’s final look at Q2 GDP, International Trade, and Jobless Claims, and Friday’s Personal Income and Outlays, Chicago Purchasing Managers Index, and Consumer Sentiment Index as potential market moving events.