Inflation news tops the economic data today as PPI, inflation at the producer level rose .1% while the core index rose .2%

Inflation news tops the economic data today as PPI, inflation at the producer level rose .1% while the core index rose .2%.  The modest gains on overall PPI were much better than the expected plus .4% estimates.  Core inflation however was .1% higher than economists were looking for.  For now, inflation looks benign.

Housing Starts jumped 22% in February to 583K units.  This is the highest level since November and well above market consensus.

Building Permits were also on the climb, up 3.0% in February.  Hard to tell what’s going on here but we feel it is a combination of weather (bad in January – good in February),  relatively small rise compared to very weak January numbers driving the large percentage gain, and a jump in multifamily projects as the rental market heats up.  We’d like to see 2 or 3 months of this kind of trend to call a bottom in residential construction.

The Federal Open Market Committee started their two day meeting today.  Expectations are for Fed Funds rate to remain unchanged, literally at zero and delivering a policy statement that will view the economy as weak with expectations for stability/recovery down the road due to the quantitative easing (money printing) that they are throwing at the economy.  The verdict will be released at 1:15 pm cst tomorrow.

For now, call it the luck of the Irish as stocks are plus 60 something, mortgage backs are plus 2/32’s, and the 10 year note is near unchanged.  Typical trading (neutral) during a two day FOMC meeting.  Technical trading patterns reflect much of the same, hanging out in the middle of the range.  We are currently in a triangle pattern with 2.84% yield as one extreme and 3.03% yield as the other.  A break of either level will force the next directional move.  Until then, grab a green beer and put on a little bag pipe music.

About Max Leaman Austin Mortgage

GREAT RATES, LOW FEES, CLOSE ON TIME™ ---- 2012 Ranked #1 Austin Residential Mortgage Lender (Austin Business Journal) 2010, 2011 & 2012 Five Star Professional (Texas Monthly) 2009, 2010, 2011, 2012, 2013 PrimeLending Chairman's Circle Award 2009, 2010, 2011, 2012 Scotsman Guide Top Originator (Top 200 Mortgage Professionals in U.S.A.) Better Business Bureau "A+ Rating" National Lender Rankings (Scotsman Guide): Top Purchase Volume (No. 10) Most Loans Closed (No. 32) Top Dollar Volume (No. 88)

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