October 30th, 2015 12:07 PM by Jonathan White
Mortgage Market News for the week ending October 30,
President and CEO
Mortgage Broker | NMLS ID: 3443
Blue Door Mortgage, LLC
1280 Centre Street
Newton, MA 02459
React to Fed
released following Wednesday's Fed meeting was not good for mortgage
rates. This week's economic data was roughly neutral. As a result,
mortgage rates ended the week higher.
around the world have had a heavy influence on mortgage rates recently.
Last week, the increased willingness of the European Central Bank
(ECB) to expand its bond buying program had a favorable effect, while China's
policy changes had an offsetting effect. This week, it was the U.S. Fed.
Even though many recent economic reports in the U.S. contained signs of a
slowing economy, the Fed statement explicitly kept the door open for a
federal funds rate hike at its December meeting. The hawkish tone
surprised investors and caused an unfavorable reaction in mortgage rates.
In the U.S.,
the first reading for third quarter GDP was 1.5%, down from 3.9% in the
second quarter. The weakness in the third quarter was mostly due to
changes in inventories, however, which are volatile from quarter
to quarter. A decline in inventories offset 1.4% of growth during the
third quarter, meaning that GDP would have increased nearly 3.0% if
inventory levels had simply held steady.
So far this
year, GDP growth has averaged 2.0%. For the full year, the consensus is
that GDP will grow a little above 2.0%, similar to the 2.4% growth seen
Next week, the
important monthly Employment report will be released on Friday. As usual,
this data on the number of jobs, the unemployment rate, and wage
inflation will be the most highly anticipated economic data of the month.
Before that, the ISM national manufacturing index and Construction
Spending will be released on Monday. The ADP Employment Change and the
ISM national services index will come out on Wednesday. With a possible
rate hike in December, there might be a larger than usual reaction to incoming
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