RATES FLAT DESPITE WEAK ECONOMIC DATA
October 20th, 2008 Categories: Buyer's Corner, First Time Buyers, Market Conditions, Relocating
Interest rates(HAVE A LOOK AT THIS WEEKS RATES) were mostly flat on the week despite economic data that was mostly negative. The New York Empire State Manufacturing Index, September Retail Sales, September Industrial Production and Capacity Utilization, the Philadelphia Fed Business Index, September Housing Starts and Building Permits, and the University of Michigan Consumer Sentiment Index were all substantially weaker than expected. Industrial Production fell by 2.8%, the largest monthly decline since December 1974. On the flip side, though, the September Producer Price Index and Consumer Price Index continued to show elevated inflation levels which should fall in coming months in light of the world economic downturn. It is increasingly likely that the Fed will cut short term interest rates at its October 29 FOMC meeting.
Other news of note included a coordinated effort by the US, France, Germany, Spain, the Netherlands, and Austria to guarantee bank debt effectively eliminating counter party risk. This has helped the overnight Libor rate fall to 1.67% today from 5.38% on October 8. Also, crude oil futures prices are currently trading at $71.47 per barrel, down about $9 per barrel on the week. The Dow Jones Industrial Average is currently at 8,940, up almost 500 points on the week.
Next week look toward Thursdays Weekly Jobless Claims and Fridays Existing Home Sales as potential market moving events.
