WeeklyBasis 10/16/06: Rates Volatile Ahead of Fed Next Week

Fixed and ARM rates are up about .125% this week, which isn’t bad after continued stock strength pulled money from bonds – and when bond prices drop in a sell-off, yields (or rates) rise. This is a huge week for markets, with quarterly earnings reports due from 106 S&P 500 companies and 12 of 30 Dow Jones companies. The Dow has been hitting record highs, and growth that’s too rapid can lead to higher inflation, which could mean a nervous Fed at next week’s rate policy meeting – since their job is to use rates to control inflation.The Fed will also get their last bit of manufacturing and consumer inflation data for the month with Producer Prices Index data Tuesday and Consumer Price Index data Wednesday. This week’s data is harder to predict than normal, which usually means rates will be up and down.

Conforming ($200,000 – $417,000) – NO POINTS
30 Year: 6.25% (6.39% APR)
10/1 ARM: 6.5% (6.64% APR)
5/1 ARM: 6.375% (6.525% APR)

Jumbo ($417,001 – $650,000) – NO POINTS
30 Year: 6.5% (6.64% APR)
10/1 ARM: 6.625% (6.765% APR)
5/1 ARM: 6.375% (6.525% APR)