Mortgage Rates Inching Up
The U.S. Treasury securities found buyers on Monday - the day prior to the Fed's expected eleventh straight rate hike. There has been a lot of talk about what the Fed would do about rate hikes in the wake of Katrina, including some sentiment for a pass at this meeting just after the hurricane struck. But signs of inflation - although not rampant - have made their presence felt in a number of different reports, and current thinking seems to support a 25-basis-point increase in the fed funds target rate as necessary to fight inflation. Inflation robs fixed-rate assets of their value.
Coming Up:
Tuesday the Federal Open Market Committee will meet for the sixth time this year, and it is largely expected that the Fed will raise target fed funds rates to 3.75 percent - the eleventh such increase since June 30, 2004. Concerns about inflation being stoked by high oil prices are the primary impetus for the rate hike. Of course, there will be major focus on the accompanying statement for clues of future intentions.
Also due are Housing Starts and Building Permits for August - the first look at the housing industry for that month. Analysts expect softer numbers, with starts at coming in at an annual rate of 2.03 million units - down from 2.04 million in July. Building permits, which often indicate future starts, are expected to fall to 2.12 million from the 2.17 million reported in July.
Overnight and into Tuesday mortgage rates could level off due to today's slight decline in Treasury yields. If the Fed goes ahead with the expected rate hike and offers no surprises in its statement, it is possible that rates could edge down slightly going into Wednesday.
Coming Up:
Tuesday the Federal Open Market Committee will meet for the sixth time this year, and it is largely expected that the Fed will raise target fed funds rates to 3.75 percent - the eleventh such increase since June 30, 2004. Concerns about inflation being stoked by high oil prices are the primary impetus for the rate hike. Of course, there will be major focus on the accompanying statement for clues of future intentions.
Also due are Housing Starts and Building Permits for August - the first look at the housing industry for that month. Analysts expect softer numbers, with starts at coming in at an annual rate of 2.03 million units - down from 2.04 million in July. Building permits, which often indicate future starts, are expected to fall to 2.12 million from the 2.17 million reported in July.
Overnight and into Tuesday mortgage rates could level off due to today's slight decline in Treasury yields. If the Fed goes ahead with the expected rate hike and offers no surprises in its statement, it is possible that rates could edge down slightly going into Wednesday.
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