Danny Salas

Chico, CA Interest Rates Market Report – Economic Influences – December 23, 2009

Rates Holding Firm With Poor Economic Data

Economic Reports SHOULD Cool Rates…But…

The Fed’s Favorite Gauge on Inflation, The Core Personal Consumption Expenditure Index (PCE) came in at a year-over-year reading of a calm, cool, 1.4%.  Estimates were set for a 1.5% reading, and remember, inflation is interest rates worst enemy.  The PCE, for the month of November, came in at 0.0%.  Now that’s cool!  Personal Spending was down to a 0.5% reading, when experts expected a 0.7% figure.  Personal Income increased, but at 0.4%, when they expected a 0.5% increase.  Personal Savings remained at a steady 4.7%.  So, what all this points to is that people are making less, spending less, and saving more.  All signs of a cool economy and generally this information would significantly benefit interest rates, however, other things are brewing, in the background.

Treasury Auction Announcement Pausing Markets

The Next Treasury Auction Announcement is due for release today.  Here’s the concern:  With a HUGE auction announcement expected, and people all around the world taking time for the holidays, making it another short week, next week, the auction is expected to disappoint.  So, the speculation is that there will not be much interest for the Treasuries, and therefore, rates will need to be increased to lure interest.  With this instability, if you don’t lock, and watch the market, you’re risking another downward trend.  I might count my blessings and just protect myself, during these nervous moments.

This entry was posted on Wednesday, December 23rd, 2009 at 8:37 am and is filed under Chico Home Loans, Home Buying, Interest Rates, Weekly Market Report. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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