Mortgage rates hit levels not seen since early May of this year. According to Freddie Mac’s weekly mortgage survey, the 30 year rate topped out at 4.23% from 4.12% earlier, an 11 basis point jump. The 15 year rate also jumped by the same amount from 3.25% to 3.37% while the 1-Yr ARM dropped slightly from 2.45% to 2.43%. That’s quite a rebound in just one week as various economic reports provided some stronger than expected numbers as the Fed wrapped up its two-day meetings.
At the conclusion of the Fed meetings last Wednesday, the Fed offered a few comments regarding internal discussions. While the Fed provided little insight as to future moves it became apparent that the Fed Funds rate will remain the same at least until next year. This in spite of the fact that retail sales for August rose by 0.6 percent and consumer spending for July was bumped up to 0.3 percent. What we may not be seeing is a final realization that rates will be on the rise and that expectation along with retail sales and consumer spending pushed rates up. The Fed made no announcement regarding the ultimate demise of QEIII which will end in late October.
This week the Commerce Department will release Durable Goods orders and we’ll also see the third revision of Q2 GDP. Revised once from 4.00% to 4.2%, it’s likely there will be few surprises with the third revisions and many traders have put the number behind them. Next week will provide a host of reports as the end of the month and the beginning of a new one always does. All eyes will be on the number of new jobs created for September. This report will be released on Friday, October 3. The number of jobs created in July came in much weaker than expected at 142,000 jobs, much less than the +200,000 expected.