| Last | Change | Percent | |
| S&P Futures | 1688.7 | -2.1 | -0.12% |
| Eurostoxx Index | 2843.7 | 2.1 | 0.07% |
| Oil (WTI) | 106.3 | -0.5 | -0.51% |
| LIBOR | 0.263 | -0.001 | -0.38% |
| US Dollar Index (DXY) | 81.74 | -0.031 | -0.04% |
| 10 Year Govt Bond Yield | 2.71% | -0.01% | |
| Current Coupon Ginnie Mae TBA | 104.3 | 0.1 | |
| Current Coupon Fannie Mae TBA | 103.4 | 0.1 | |
| RPX Composite Real Estate Index | 200.7 | -0.2 | |
| BankRate 30 Year Fixed Rate Mortgage | 4.39 |
Markets are down small after wholesale inflation came in lower than expected. Mortgage Applications fell 5% last week. Bonds and MBS are up small.
Mortgage Apps fell 4.7% last week, with the purchase index decreasing 5% and the refi index dropping 4%. Refis were 63% of all applications, with 35% of the refis being HARP. Surprising result given that mortgage rates fell last week, albeit by only a few basis points.
The Producer Price Index showed low inflation at the wholesale level. Now that QE4EVA is officially done, inflation numbers matter again. If they are too low, then the Fed may re-think the timing of their exit strategy. The Fed fears deflation more than anything, because if prices are falling in the context of zero percent interest rates, that means real (inflation-adjusted) rates are rising. And that problem has bedeviled the Japanese for almost 20 years. In related news, 65% of all economists expect the Fed to begin tapering QE at the September meeting. The expected change? Purchases go from $85 billion to $75 billion.
Remember all of that widespread mortgage fraud? Turns out the Obama administration made it up, or at the very least wildly exaggerated it. The Administration was forced to reduce the number of people criminally charged from 530 to 107. Victim losses were reduced to $95 million from $1 billion, and the number of victims were cut to 17,185 from 73,000.
Why does Obama want Larry Summers for the Fed, when he can make a groundbreaking choice with eminently qualified Janet Yellen? According to a note from Mizuho Chief Economist Steven Ricchiuto, it is because Summers is more of a political guy who will support activist fiscal policy. In other words, Obama wants an ally at the Fed to increase pressure on Congress for more public-works spending (in order to dole out projects to help boost vulnerable candidates in 2014). Interesting take, and makes more sense than anything else I have heard.
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