Commentary: Mortgage investors are nudging rates fractionally higher this morning as they respond to data indicating the economy is beginning to accelerate down the road of recovery.
The pace of inflation at the consumer level rose at its fastest rate in more than 18 months in February, driven by higher food and energy prices. The upward pressure on mortgage interest rates would have been greater this morning had it not been for the fact that the core rate of consumer inflation - a value that strips out the more volatile food and energy components - posted a modest 0.2% increase last month. Even though the jump in the core rate of inflation at the consumer level was a touch above economists' expectations, it is still not yet high enough to induce the Federal Reserve to begin tightening their short-term benchmark interest rates - good news for the prospects of relatively steady mortgage interest rates.
In a separate report, the Labor Department said first-time claims for government unemployment benefits fell 16,000 to 385,000 during the week ended March 12th. The four-week moving average of jobless claims - a better measure of the underlying trend - dropped to its lowest level since mid-July 2008. The closely watched average has now posted readings below 400,000 for a third straight week - suggesting strongly to most economists that an acceleration in monthly net new job creation will soon begin to exceed 200,000. If so, the prospects for notably lower mortgage interest rates are fading fast.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
