Market Review

►A LOOK BACK – Last week the market was surprised by the relative strength in the Retail Sales Report which shows the consumer remains somewhat active. The bad news reported on the same day was that the labor sector remains under withering downward pressure. On Friday China’s Premier Wen Jiabao said publicly that he’s concerned about the safety of US government debt and thinks China should diversify its $1.95 trillion investment portfolio. China holds almost one-third of their foreign exchange reserves in US Treasuries. This may slow China’s investments in the US treasuries which will place pressure to increase the returns offered which will pressure mortgage rates higher.

►WHAT’S AHEAD – This week the FOMC meets on Tues. and Wed. Market participants think the Fed will leave rates unchanged but will be interested to see what the post-meeting minutes reflect. The Producer Price Index and Consumer Price Index reports are due and are expected to show little to no signs of inflation. The stock market will continue to exert pressure on mortgage rates as well – continued weakness in stocks will pressure lower mortgage rates and any rally in the market will push mortgage rates higher.

Greg Burkett

Preferred Home Loan, Ltd.

281/657-0472 x 301 (Office)

713/906-2883 (Cell)

gregb@preferredhl.com

For more information about real estate issues in Katy or West Houston contact Steve Reddell. He is a licensed REMAX real estate agent in Katy, Texas you can trust. You can contact him directly at 281-994-5173 or visit him on the web at Katy Family Homes.

Filed under: Economy/Market