December 14, 2022 – Economic News

• December 14, 2022
• realestatelife
• Announcements, Business & Markets, Fed, Interest Rates, Politics & Economy, Rates, Real Estate, Real Estate Finance, Recession, World News, Your Real Estate Life

Taking it to the House: Weekly Mortgage Applications were up 3.2%. Purchase Applications saw the biggest gain at 4.0% and Refinances were up 2.8%.

Genco Olive Oil: Import Prices were down -0.6% vs. est. of -0.5% and Export Prices were down -0.3% vs. est. of -0.6%

The Talking Fed: Starting at 2 pm ET, we will get the Fed’s latest Interest Rate Decision and Policy statement. The bond market has a 50BPS rate hike priced in. However, there still can be a lot of volatility even if the Fed does hike by 50BPS. This volatility can come from one of three areas (or even from all three areas at the same time). These three areas are: The change in the policy statement language compared to the prior statement, The path of rates and inflation in their Economic Projections (dot plot chart) and the live presser with Fed Chair Powell.

No news this morning that interests traders or investors. As if anyone needs a reminder, this afternoon at 2 pm ET the FOMC policy state, the Fed’s quarterly outlook for the next two years, and at 2:30 pm Jerome Powell’s press conference.

If there is anything a given coming from the Fed, it’s that the Fed will increase the FF rate 50 bps and then slow the increases in 2023. How slow will depend on wage growth and economic conditions. Inflation of prices is decreasing but it is wages that will be the dominant focus in 2023. The 50 bp increase is totally discounted in current rate levels.

MBA mortgage applications better last week with rates stabilizing. The composite index +3.2%, purchase apps +4.0% and re-finance apps +2.8%. Any improvement is welcome. According to MBA’s data the contract rate on a 30-year fixed mortgage ticked up 1 basis point to 6.42% last week but is down since reaching a more than two-decade high of 7.16% in late October. The survey uses responses from mortgage bankers, commercial banks, and thrifts. The data cover more than 75% of all retail residential mortgage applications in the US.

Nov import and export prices continue to increase but less than forecasts. Imports yr./yr. 2.7% from 4.1% in October. Export prices yr./yr. +6.3% from 7.4%.