Retail Sales Report Disappoints

Mortgage interest rates are improving this morning following a rough day yesterday. This morning’s Retail Sales report showed that consumers are not buying televisions, washers, dryers, refrigerators and other longer lasting retail goods at the pace the market anticipated.  At this time of the year, it is shocking to the market that consumer spending isn’t as strong as many would like us to think.  With consumer debt already at record highs, some may not be willing to add to their debt burden this Christmas season.  At the end of the day, the consumer has the greatest impact on the economy.  If the consumer slows the pace of spending, that will trickle down into many other areas.


Yesterday, President Trump announced a plan that will avert new tariffs that are set to hit this weekend.  Given the adverse impact that would have on the fragile US economy, this portion of the trade agreement makes sense.  If in fact this is signed, it will be far from an end to the trade war.  In fact, already today there is speculation that the current agreement will not be as comprehensive as the market expected as of yesterday.  It’s no surprise to have continued confusion and back and forth rhetoric.  I expect this to last at least through the election.


The extreme volatility in mortgage interest rate pricing continues.  Unless mortgage bonds are able to make a break above the seemingly formidable ceiling, we will maintain a locking bias.

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