Chatter

Sept. 9, 2005

Mortgage prices were roughly unchanged on Friday, although stocks rallied (the Dow closed 82 points higher to 10,678) and oil prices declined (-$0.40 to $64.08 a barrel). Overall it was a very quiet day, and many lenders saw quiet lock days with sizeable fallout/expirations. After the hurricane the bond markets priced out any chance of a Fed rate hike through the rest of the year. But last week markets moved back to a consensus expectation that there may be a pause this month but the Fed is fully prepared to restart a measured pace rise in Fed Funds. The 10-year note is now back above 4.10% at 4.16%.

As mentioned on Friday, this week brings us releases of several important pieces of data, including two very important inflation related reports: the Producer and Consumer Price Indices. The first of the week’s data is the PPI tomorrow morning. (There is no scheduled news today, but the markets appear “nervous” and mortgage pricing is about .125 worse than Friday afternoon.)

The federal government reported that Americans used 4% less gasoline amid skyrocketing pump prices the week after the hurricane than they did the week before Hurricane Katrina hit. But whether that indicates consumers have decided to conserve or merely that they couldn't find all the gasoline they wanted isn't clear. Meanwhile, the U.S. Coast Guard said Thursday that 52 energy production platforms in the Gulf of Mexico were missing and 58 were damaged by the hurricane, nearly double the report of missing or damaged platforms Tuesday.