Mortgage Rates edge higher, Low Inflation levers may not be temporary, Corporate Earnings season ramps up

October 11, 2017

Mortgage rates continued to edge higher in the latest week, as reported by the Mortgage Bankers Association. The 30-year conforming mortgage rate ($424,100 or less) rose to 4.16% from 4.12% with an average point of 0.44. Jumbo 30-year rates also rose from 4.09% to 4.11% with 0.31 points. The 30-year fixed FHA was essentially unchanged at 4%. The survey covers over 75% of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990.

Federal Reserve Bank of Chicago President Charles Evans was speaking in Zurich on Wednesday, saying that low inflation levels here in the U.S. may not be a temporary phenomenon. Mr. Evans also said that the fundamentals for the economy here in the States are really very strong. Just recently, the Fed’s favorite inflation gauge, the annual Core Personal Consumption Expenditures (PCE), fell to 1.3% from 1.6% in April and well below the Fed’s target range of 2%.

Corporate earnings season ramps up this week with numbers from JPMorgan Chase and Citigroup on Thursday and Bank of America and Wells Fargo on Friday. The S&P 500 companies are expected to post a 4.6% rise in earnings year-over-year. According to Thomson Reuters, the 4.6% forecast is down from 5.9% at the beginning of the month, and 14.9% a year earlier.

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