This week was jam packed with news, mostly all bond/rate friendly. On Tuesday, the Labor Department report on Consumer Price Index was released showing low inflation. CPI increased 0.2% for February and increased 1.5% over the past 12 months, the smallest gain since September 2016. Core CPI increased 0.1% for the month, the smallest increase over past 7 months, while annual core CPI increased 2.1%. Annual Core CPI had increased 2.2% for past three months. The Fed has a 2.0% inflation target as tracked by a different measure, the core personal consumption expenditures (PCE) price index. The most recent core PCE released was for December and showed a year-on-year increase of 1.9%. Core PCE last reached the Fed target in March last year for the first time since April 2012.
Friday was packed with news. First, the 10 Year Treasury dropped to 2.59%, the lowest since mid-December.
Also, The Federal Reserve released February data showing a decrease of 0.4% in manufacturing production for February. The results were well below expectations of a 0.3% increase. Factory production increased 0.1% from last February. Another manufacturing report released this morning, the New York Feds Empire State business conditions, reported the index fell to a reading of 3.7 in March, lowest in two years, missing forecast of 10.0 and a drop from 8.8 in February. Manufacturing accounts for over 30% of U.S. GDP.
On the flip side, Consumer sentiment index actually increased to 97.8 as reported by the University of Michigan monthly report. The data exceeded forecast of 95.6. Within the report a measure of current conditions was highest since October, while conversely a measure of buying conditions for big purchases was lowest since 2015, which could be a sign for things to come since Consumer spending accounts for about 70% of U.S. economy.
Across the pond, Britain parliament voted to seek a delay in the exit from the European Union. In Asia, news reports state the U.S China trade discussions have advanced again with the potential of a Chinese state visit to the U.S. combined with the signing of a trade deal.
All in all, rates are still extremely good and Colorado is still a great place to live. We expect rates to be fairly flat for the rest of the 1st Quarter.
The Altitude Group
REALTOR® | MCNE
REALTOR® | CNE