15 September 2009 ? Mortgage Bonds opened down 28 bps. They are currently down 6bps as a result of some economic reports today. The bonds have been affected by much higher than expected wholesale prices, which can be a sign of inflation. The Producer Price Index (PPI…a measurement of inflation) rose 1.7% at the wholesale level, which is double the 0.8% expectations. PPI or wholesale inflation does not always get passed on to the consumer, which is the real inflation concern. We will get a much better read on this tomorrow when the Consumer Price Index (CPI) is released. One thing is for sure, once inflation arrives it always increases rates!
Consumers were spending last month and the retail sales rose by 2.7%, the largest increase in 3 years. However, most of the spending was generated from the Cash for Clunkers program, which has now ended. Excluding autos retail sales rose by 1.1%, which is better than the expected .4%.
The 30-year fixed is at 5% (5.055% APR), the 15-year fixed rate is at 4.5% (4.594% APR).Email This Post To a Friend.