Rates Edge Lower On Bernanke Testimony

Interest rates edged lower again this past week on increased market expectations that the Fed is near the end of its tightening cycle. Ben Bernanke, Chairman of the Federal Reserve Bank, testified before Congress Wednesday and Thursday on the state of the economy. He stated that the economy is moderating which should limit inflation pressures over time. Minutes from the June FOMC meeting showed the members’ view of current monetary policy ranging from modestly restrictive to somewhat accommodative. The market increasingly expects that the Fed may leave the Fed Funds rate unchanged at its August meeting.

The market also received new economic data. The July New York Empire State Manufacturing Index, June Housing Starts, and the July Philadelphia Fed Index were all weaker than expected. The June Producer Price Index (PPI) and core June Consumer Price Index (CPI excluding the food and energy components) were both higher than expected. Year over year, core CPI is up 2.6% which is above the Fed’s comfort zone. June Industrial Production and Capacity Utilization were also stronger than expected.

Next week look toward Tuesday’s Existing Home Sales, Thursday’s Durable Goods Orders and New Home Sales, and Friday’s Advance read on second quarter GDP as potential market moving events. Wednesday’s Fed Beige Book, a survey of regional economic conditions, may also be a market mover.

Current rate for a 30 year fixed loan is 6.625% with no points based on a $250,000 Purchase Transaction; $187,500 Loan Amount; 10-20% Down.

Current rate for a 15 year fixed loan is 6.25% with no points based on a $250,000 Purchase Transaction; $187,500 Loan Amount; 10-20% Down.

Current rate for a 5 year ARM is 6.50% with no points based on a $250,000 Purchase Transaction; $187,500 Loan Amount; 10-20% Down.

Posting info and rates provided by:
Grant Hickman
Senior Loan Officer
Premier Mortgage Group, LLC
1844 Folsom Street
Boulder, CO 80302
303-449-8855
ghickman@pmglending.com