Mortgage rates are rising again this week
30 minutes ago
Mortgage rates rose again this week, according to Freddie Mac.
The average interest rate on a 30-year fixed-rate mortgage was 6.9% this week, up from 6.77% last week. Interest rates haven't been this high since mid-December.
Mortgage rates have been trending downward since reaching a high of 7.79% in October, according to Freddie Mac. Falling interest rates had drawn more buyers into the market, but increases in recent weeks could push them back to the sidelines.
“Many existing homeowners remain hesitant to put their properties up for sale until borrowing costs fall further,” wrote Priscilla Thiagamoorthy, senior economist at BMO Capital Markets. “And with the Fed signaling that it is in no rush to cut rates any time soon, we expect resale market activity to remain subdued in the first half of the year.”
The US Federal Reserve's Jefferson plans to cut interest rates this year, but warns against taking action too quickly
1 hour and 48 minutes ago
A Federal Reserve official is encouraged by progress on inflation and signs of slowing consumer spending, but still warns against cutting interest rates too quickly.
Federal Reserve Board of Governors Vice Chairman Philip Jefferson said interest rate cuts could come “later this year” but reiterated his colleagues' view that more data on inflation trends is still needed. In a statement to the Peterson Institute for International Economics on Thursday, Jefferson noted that inflation has been trending downward, but also said historical examples show the dangers of cutting too quickly.
“Excessive easing can cause the restoration of price stability to stall or reverse,” Jefferson said, pointing to the Federal Reserve’s actions in 1967 when inflation spiked after interest rate cuts.
Additionally, an “unforeseen shock” could rock the economy, he said. Consumer spending could remain stronger than expected or unemployment could rise faster than expected. Geopolitical events such as the conflict in the Middle East could also lead to unexpected shocks in commodity prices.
Jefferson's comments came after minutes of the Federal Reserve's Federal Open Market Committee's latest meeting were released yesterday, showing that many officials were concerned about cutting interest rates too soon.
Recent comments from Federal Reserve officials have undermined investor expectations for an early interest rate cut. Investors now only expect a 4.5% chance that the Federal Reserve will cut interest rates on March 20, down from 42.3% a month ago, according to CME Group's FedWatch tool.
-Terry Lane
Services are weakening as production increases
3 hours and 8 minutes ago
Business growth slowed in February as service sector activity slowed and manufacturing rebounded.
According to data released by S&P on Thursday, service industry companies slowed overall business growth. The purchasing managers' index for services was at 51.3, a three-month low. This is below economists' expectations and below the previous month's value.
Manufacturers, on the other hand, exceeded economists' expectations and reached a 10-month high. At 52.3, the manufacturing PMI was three points above the previous month and more than two points above economists' expectations.
Jobless claims fall to four-week low
4 hours and 23 minutes ago
Apparently getting fired is still pretty rare these days.
Seasonally adjusted, 201,000 people filed new claims for unemployment insurance in the week ended Feb. 17, the Labor Department said Thursday. That was 12,000 fewer than the week before and reached the lowest level in four weeks and a relatively low level by historical standards.
The recent persistently low level of jobless claims is one of several signs that the labor market remains healthy – or at least avoiding mass layoffs of any kind – despite long-standing recession forecasts.
Many experts expected a recession and widespread job losses because the US Federal Reserve's anti-inflation interest rate hike campaign drove up borrowing costs for all types of loans, deliberately throwing sand into the economy's gears brake.
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