Market Forecast: Federal Open Market Committee Meeting, Mortgage Apps, and Consumer Price Index
This week, the Federal Open Market Committee (FOMC) will meet on Tuesday and Wednesday for its last semiannual monetary policy meeting of the year. The Fed is not expected to move interest rates during this meeting. In housing news, the Mortgage Bankers Association (MBA) will release its weekly mortgage application survey on Wednesday. Another market-moving report scheduled is the consumer price index.
The FOMC meets on Tuesday and Wednesday. Based on the minutes from the previous meeting, Fed officials are not likely to cut interest rates again at this meeting. Specifically, the minutes suggest the current stance of policy would stay the same, “as long as incoming information about the economy did not result in a material reassessment of the economic outlook.”
Last week, the MBA weekly mortgage application survey returned mixed results. New purchase mortgage application submissions increased 1.0% and the refinance campaign declined 16.0% for a composite decrease of 9.2%. The shortened holiday week may have influenced the data. Joel Kan, MBA’s associate vice president of economic and industry forecasting, explained, “The seasonally adjusted purchase index was at its highest level since July, as a combination of wage gains, slower home-price appreciation, and slightly easing inventory conditions [for new construction] continue to support increased activity.”
The consumer price index tracks month-to-month changes in the prices of a fixed basket of goods and services. The core PCE is used by the Federal Reserve to gauge inflationary trends. In October, the consumer price index jumped 0.4% month-over-month. The core PCE is up 1.8%, slightly below the Fed’s 2% targeted rate.
Even with no interest rate movement this week, mortgage rates will likely stay low through the end of the year. If you’re interested in buying a new home or refinancing your current loan while rates are low, let me know.
Sources: CNBC, CNBC, Econoday, MarketWatch, MarketWatch, Mortgage News Daily