196867 Resource 178438 178984 178982 1202512088136 1202526029605 Controlled Mortgage Interest Rates Ended the Week Higher

What will next week's the Retail Sales Data tell us?

<p>Mortgage bond prices fell last week pushing mortgage interest rates higher.&nbsp; Trading was volatile but most of the negative movement occurred the latter portion of the week.&nbsp; Traders remained concerned about inflation, which erodes the value of bonds.&nbsp; Philadelphia Fed President Plosser did very little to alleviate those concerns by stating that core inflation would remain elevated despite slower economic growth.&nbsp; </p><p>For the week, interest rates on government and conventional loans rose by about 3/8 of a discount point.</p><p>The retail sales data Wednesday will be the most important ever next week.&nbsp; Retail sales data is the first indication of weakness or strength in consumer spending released each month.&nbsp; The bureau of the Census of the US Department of Commerce provides information on how much the consumer spends on the purchase of goods.&nbsp; This data provides the consumption part of the gross domestic product.&nbsp; Retail sales data represents merchandise sold for cash or credit by retailers.&nbsp; Durable goods, such as autos, make up 35% of the figure.&nbsp; The balance consists of non-durables such as gasoline, restaurants, and general merchandise.</p><p>There are several drawbacks to the report.&nbsp; The data covers purchases of goods only, not services.&nbsp; It is also not adjusted for inflation and is extremely volatile.</p><p>Economists are concerned that the current economic uncertainty will continue to curtail consumer spending habits.&nbsp; Consumers have generally been given credit for sustaining the economy despite rising energy prices and home price declines.</p><p>While Philadelphia Fed President Plosser coutioned last week about predicting the future of the economy based on one piece of data, the retail sales report is&nbsp;likely to cause mortgage interest rate volatility.&nbsp; The data will be a vital component in determining future Fed actions.&nbsp; Plosser was clear that the Fed remains concerned about inflation despite the recent rate decreases.&nbsp; He warned that the Fed needs to be &quot;particularly alert&quot; about rising inflations expectations.&nbsp; Inflation, real or perceived, is bad for bonds.&nbsp; If the fear of inflation increases, mortgage interest rates could trend higher.&nbsp; Be cautious.&nbsp;&nbsp;Home interest rates remain favorable but lower future rates are not a given.</p> 9 application/xml false home loan rates mortgage interest rates retail sales data http://blog.bestflagstaffhomes.com/public/item/194028 Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 5.1; .NET CLR 1.1.4322; .NET CLR 2.0.50727) 127.0.0.1 127.0.0.1 aheitland 24.121.32.9 false true false false true 178975 false false true false false false true 178438 blog blogsite/BestFlagstaffHomes/web