Mortgage rates spent the first part of last week moving upward, as good economic news seemed to dominate. Both the ISM indices increased, even with consensus estimates calling for decreases. However, on Friday, rates reversed course following a disappointing employment report. While a reasonable 169,000 new jobs were created last month, revisions to previous months erased 74,000 jobs from June and July’s reports. The unemployment rate did notch downward to 7.3%, but unfortunately, the decrease was due to a shrinking in the employment participation rate.
While this week starts with rates poised to drift downward, we are facing another potentially volatile week for global financial markets. The debate and potential action, or inaction, on Syria could easily drive rates either way. If the US strikes Syria, then rates would likely move downward. We’re also one week away from the next Fed meeting. If markets begin to believe that the Fed will hold monetary policy unchanged, then rates could move even further downward as the week progresses.
(courtesy of Joe Massey, Castle & Cooke Mortgage)