Rates Flat Despite Fed Rate Hike

Mortgage interest rates were mostly flat on the week despite the Fed raising the Fed Funds rate by 0.25% after its FOMC meeting. The Fed cited the strong labor market as the reason for the rate increase. Markets expect three rate hikes in 2018 but it’s dependent upon economic improvement. Economic data was mixed. The NFIB Small Business Optimism Index, Jobless Claims, November Retail Sales, and November Export Prices were stronger than expected. November JOLTS Job Openings, the November Consumer Price Index (CPI) excluding the food and energy components, November Industrial Production, and November Capacity Utilization were weaker than expected. The overall Producer Price Index (PPI) and Consumer Price Index (CPI) were in line with expectations. The Treasury auctioned $56 billion of 3 Year Notes, 10 Year Notes, and 30 Year Bonds which were met with okay demand. Congress is expected to pass tax cuts early next week.

The Dow Jones Industrial Average is currently at 24,629, up about 300 points on the week. The crude oil spot price is currently at $57.39, up slightly on the week. The Dollar strengthened slightly versus the Euro and weakened versus the Yen on the week.

Next week look toward Monday’s Housing Market Index, Tuesday’s Housing Starts, Wednesday’s Existing Home Sales, Thursday’s final look at Q3 GDP, Jobless Claims, Philadelphia Fed Business Outlook Survey, FHFA House Price Index, and Leading Economic Indicators, and Friday’s Durable Goods Orders, Personal Income and Outlays, New Home Sales, and Consumer Sentiment Index as potential market moving events.