WeeklyBasis 03/20/06: Rates Down Almost .25%

Rates are down almost .25% this week following weaker than expected Retail Sales and Consumer Price Index data last week. It’s a good thing too since last week opened at two-year highs. Tonight Fed chairman Ben Bernanke will make public comments ahead of next Tuesday’s Fed meeting where we can expect a .25% hike in the overnight Fed Funds Rate. Otherwise, tomorrow’s Producer Price Index (a measure of manufacturing sector inflation) is the other big economic release for bond traders to trade on this week. We’ve also got Existing and New Home Sales on Thursday and Friday which are expected to be slightly lower, but these figures usually don’t influence rate markets unless they’re far below consensus estimates. It should be a relatively calm rate week. Rates could inch up slightly ahead of next Tuesday’s Fed meeting, but it’s not a foregone conclusion because Fed Funds hikes are usually priced into the market in advance. If we see any significant volatility, I think it is more likely to come next week when we get Bernanke’s statement coming out of the 3/28 meeting.

Conforming ($200,000 – $417,000) – NO POINTS
30 Year: 6.25% (6.39% APR)
15 Year: 5.875% (6.015% APR)
5/1 ARM: 6.125% (6.275% APR)

Jumbo ($417,001 – $650,000) – NO POINTS
30 Year: 6.375% (6.515% APR)
15 Year: 6.125% (6.265% APR)
5/1 ARM: 6.25% (6.4% APR)