Daily Market Update 6/14/17

Mortgage rates inched lower ahead of today’s Fed policy statement following the release of weaker than expected economic data.  This morning, May Retail Sales fell 0.3%, well below the consensus forecast for an increase of 0.1%.  Excluding the volatile auto component, sales also fell 0.3%.  Separately, the May Consumer Price Index (CPI) declined 0.1%, and was 1.9% higher than one year ago.  Both readings came in below expectations.  Core CPI, which excludes volatile food and energy components, rose 0.1%, a bit less than expected.  The Federal Reserve will wrap up its two day meeting this afternoon and release a policy statement at 2:00 PM, followed by a press conference at 2:30.  While it is widely expected that the Fed will raise short-term interest rates by 0.25%, mortgage rates will likely be more affected by the Fed’s plans to reduce its holdings of Treasurys and mortgage-backed securities later this year.  Investors will be watching closely for clues about the timing and scale of these reductions.  No other key data will be released today.

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