Monday Market Commentary

by Alex Stenback on September 19, 2005

                                                           Graphic Courtesy MSNBC
Last Week
Rates up slightly last week as a spike in September price pressures (inflationary indicator) was revealed by the Philadelphia Fed report.  For the week, most mortgages rose by about 1/2 a discount point.
This Week
All eyes on Tuesday’s Fed meeting.  Some corners of the financial markets are expecting/have been lobbying for the Fed to suspend or pause the rate hike cycle, citing increased fuel costs and post Katrina economic effects.  Futures markets show traders have a 65% expectation that the Fed will indeed pause here, which means that if they do not, and there are some pretty good reasons (inflation chief among them) they won’t, mortgage rates could face a "nasty little upward adjustment," in the words of one market expert we follow.

{ 2 comments… read them below or add one }

Paul September 19, 2005 at 2:25 pm

CNN claims that there is an 84% chance of another rate hike, citing the Chicago futures market.

Editor September 19, 2005 at 10:34 pm

Noted – Thanks for the info. Seems tommorrow’s hike is “baked in” and we’ll be vigorously parsing the statement for future direction.

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