Monday Market Commentary

by Alex Stenback on June 27, 2005

Last Week
A fairly quiet week was highlighted by new home sales data, and an interesting series of comments by a major bond market player. New home sales, while strong, missed consensus predictions, which did not give the bond/interest rate market much direction.  Combine that with PIMCO chief investment officer predicting an Autumn Fed rate cut, and mortgage rates were able to eek out some small gains by the end of the week.
This Week: The Fed. Bond Market Closed Friday
The Fed meets Wednesday and Thursday – a .25 basis point increase to key rates is expected.  Though these rate hikes are mostly discounted by the market ahead of the actual announcement, the potential for volatility still exists as traders parse the accompanying comments for signs of, well, just about anything – a change in economic outlook, inflationary concerns, Greenspan’s mood, hints at future Fed policy changes, etc. etc.  Tread carefully.
· This Week’s Econmic Calendar [briefing.com]
· Latest Twin Cities Real Estate Market Report [MAAR.pdf]

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