Fannie and Freddie to Speed Up Purchases of Securities; Crucial Indices Due Out This WeekFeb 16 2010
Fannie and Freddie to Speed Up Purchases of Securities; Several Indices Due Out This Week
February 16, 2010 - Though last week had minimal market data, the economic reports released strongly favored the road to recovery. For the week ending February 6th, weekly jobless claims were at 440,000, decreasing 43,000 from the previous week. Additionally, the Commerce Department reported that retail sales sprung back in January, reaching $355 billion for the month. With mortgage rates continuing to remain at their current low levels, consumers are continuing to benefit as the economy is mending.
Freddie and Fannie also announced last week that they would be speeding up their purchases of poorly- or non-performing loans from investors. Purchasing these securities will cost the government less than advancing payments on the non-performing loans to investors. The move has sparked a debate on how this will ultimately impact mortgage rates.
This week has some very important economic data for markets to digest, with both Consumer and Producer Price Indices due. With some occasional signs of inflation, an unexpected increase in the CPI could break rates out of their recent holding pattern. Analysts also expect strong housing starts for January as credit for first-time homebuyer remains in effect.