THE BASIS POINT

Marketweek 02/02/04: Greenspan’s Groundhog Day Forecast

 

Rates/commentary for the week of February 2, 2004.  Punxsutawney Phil, one of the world’s preeminent forecasters, saw his shadow this morning which means six more weeks of cold conditions.  And with 4th quarter GDP coming in colder than expected on Friday, preeminent forecaster Alan Greenspan seems to think that the economy is safe from inflation, which means we could be looking at six more months of record-low mortgage rates.  Today’s market open corroborated this.  This week will be much like the Super Bowl, starting very slow, then picking up steam.  The most important indicator this week comes Friday with the January Employment Report.  As you remember, when a weak Employment Report hit in January, rates dropped faster than Janet Jackson’s “malfunctioning” top during the half-time show.  Until Friday, rate movement is going to come from stock and bond market interaction; nothing too out of the ordinary, much like the commercials from last night.

Conforming ($50K – $333,700K) – NO POINTS
30 Year: 5.625%  (5.765% APR)
15 Year: 5.0%  (5.14% APR)
5/1 ARM: 4.5%  (4.65% APR)

Jumbo ($333,701 – $650,000) – NO POINTS
30 Year: 5.875%  (6.015% APR)
15 Year: 5.25%  (5.39% APR)
5/1 ARM: 4.75%  (4.9% APR)

 

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