Daily Market Update 11/20/13

Mortgage rates held steady Wednesday following the release of mixed economic data. This morning, October Retail Sales rose 0.4%, well above expectations. The Consumer Price Index (CPI) fell 0.1%, and was just 1.0% higher than one year ago. Core CPI, which excludes volatile food and energy components, increased 0.1%, matching forecast. Core CPI was 1.7% higher year-over-year, indicating that inflation remains below the Fed target rate of 2.0%. Existing Home Sales fell by 3.2% in October to 5.12 million annual units. The Mortgage Bankers Association reported that average conventional 30-year fixed rates increased slightly to 4.46%, not including fees. This afternoon the Fed will release detailed minutes from last month’s Federal Open Market Committee meeting, which may provide additional insight into the debate between Fed officials over the impact of the government shutdown. Yesterday, in a speech to economists in Washington, Fed Chairman Ben Bernanke said “The target for the Federal Funds Rate is likely to remain near zero for a considerable time after the asset purchases end, perhaps well after”. Policy makers are discussing how to slow the pace of asset purchases know as “quantitative easing” without causing a surge in mortgage rates.

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