It’s Bill Rapp, the Mortgage Viking here, let me tell you about what the Good Ole Boys on Wall Street are talking about today…
Here is a stat that I found intriguing: In most of the country, single women are outpacing men when it comes to homeownership. Despite females only making 80% of what the average male does, according to a LendingTree report. Sadly this is known as the glass ceiling, and also why many women gravitate towards sales positions.
In financial news: Treasury yields are slightly lower across the curve this morning, with the 10Y hovering near 2.90%.
Sovereign bonds have rallied, led by Italian bonds after the Prime Minister offered a lower deficit target in a gesture to the EU. But the bigger bond news this morning comes from the ECB, where officials have announced an end to being net-buyers of bonds in its QE program, and will now simply roll over maturing debt to maintain the size of its now $4T+ balance sheet.
This period of balance sheet maintenance will continue well into the future, as the bank has noted that reinvestment will continue well beyond when the ECB plans to raise interest rates – which is not projected to occur until at least late next year.
There are likely to be plenty of skeptics, given inflation is still well below 2%, growth has been fairly slow since the summer months – and not to mention the list of geopolitical risks currently facing the Eurozone. Mario Draghi is set to speak later on this morning, where he will also unveil updated economic projections including inflation and economic growth for the Aggregate Eurozone area.
Import prices should decrease in November as falling oil prices send the headline index sharply lower, however dollar appreciation has been the primary reason that inflationary pressures from imports have remained subdued. This trend is expected to continue as the dollar strengthens further from increasing policy rate differentials between the U.S. and other advanced economies.
Gasoline prices were down 4.2% in November after rising 3% in October, and continued weakness in the oil market could weigh on inflation for months to come. This is troublesome for our Houston Market.
However, the Fed looks at core inflation more closely, which actually ticked higher to 2.2% from 2.1% year over year.
Similar to the early-2017 inflation dip, wireless service pricing helped mitigate the effects of continued increases in rental costs – which have increased as many consumers have opted to rent rather than purchase expensive homes at elevated mortgage rates.
Overall, today’s CPI print does just about nothing for the Fed. Inflation continues to stay tethered to 2%, which will allow the Fed to maintain a gradual approach, even in the very late stages of this cycle.
I will leave you with this thought, only 12 Days left till Christmas!
This is Bill Rapp, and please do not forget to subscribe and share this post if you found it useful!
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