Friday Real Estate & Mortgage Interest Rate Update

Feb personal income and spending at 8:30, both were right on forecasts, up 0.3% for both. Jan spending was revised lower, from +0.4% to 0.2%. The increase in spending was the most in three months. Today’s data also showed the core price measure, which excludes fuel and food, rose 0.1% in February from the prior month and was up 1.1% from a year ago, the same as in January. Total prices, which are the ones tracked by Federal Reserve policy makers, also increased 0.1 last month and were up 0.9% from February 2013, the smallest year-to-year gain since October. The lack of even minor increases in prices is not a good thing for increasing the growth pace and one reason the Fed will push harder to drive the idea of sooner rather than later increasing short term rates. 

WSJ headline this morning; Russian troops massing near Ukraine are actively concealing positions and establishing supply lines that could be used in a prolonged deployment, ratcheting up U.S. concerns. Such an incursion could take place without warning because Russia has already deployed the array of military forces needed for such an operation, say officials briefed on the latest U.S. intelligence. The rapid speed of the Russian military buildup and efforts to camouflage the forces and equipment have stoked U.S. fears, in part because American intelligence agencies have struggled to assess Putin's specific intentions. So far it is kind of chess game between Putin and Obama with Europe’s leaders rather quiet.

At 9:55 the U. of Michigan consumer sentiment index, expected at 80.5 frm 79.9 at mid-month, was at 80.0 and the lowest monthly reading since last November . Consumer attitudes have been mixed depending on what survey one looks at; earlier this week the Conference Board said consumer confidence had increased to the best level since 2008, then Bloomberg came out with its measurement that was a lot less enthusiastic.

 I will continue to suggest locking through next week before the March employment report is out on Friday with early forecasts of 190K increase in non- farm payrolls. Interest rates continue to trade in a narrow pattern; the treasury markets somewhat supported by safety moves over the uncertainties on Russia/Ukraine developments. Other than that issue the long end of the curve has little support given the Fed’s stance, ending the monthly bond and MBS purchases and talking about increasing interest rates sooner than previously expected.