These numbers suggest that the Fed will remain restrained in its practice of raising short term rates, which may be an indication the Fed doesn't see inflation to be as great a threat as the markets previously had thought it would be.
More Quotes from Frank Nothaft:
Today ARMS account for about 30 percent of new loans. We forecast that share to fall to around 25 percent by the end of 2006.Frank Nothaft
The most recent economic indicators ... showed that inflation is, indeed, being held in check. That news allowed long-term mortgage rates to drift a little lower.
Frank Nothaft
Concern over weaker consumer confidence and industrial production outweighed the pick-up in retail sales and business inventories causing interest rates to decline even further this week. Adding to the decline was a flight-to-quality in the bond market from nervous investors worried about falling stock prices and the possibility of war in the Middle East.
Frank Nothaft
Lower oil prices at least compared to the last several months have helped to alleviate some of the inflation fears that the market has been experiencing lately.
Frank Nothaft
The general feeling in the market is that the economy may have bottomed out and recovery is in sight, ... It is just that sort of atmosphere that kept mortgage rates from falling last week. But if the economy begins to overheat and inflation becomes a threat once again, mortgage rates will almost certainly begin to rise in response. Currently, however, inflation is well contained and there is ample room for the economy to recover.
Frank Nothaft
Anticipation that the Federal Reserve may well cut rates at its next meeting, combined with further weakness in certain sectors of the economy, caused interest rates to fall again.
Frank Nothaft
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