Rising Rates Are Raising HopesOct 17 2011
Rates are…rising! Typically disappointing news in the past, seeing rates begin to rise in today’s economy is reassuring and welcomed as we’ve watched rates drop to unbelievable lows throughout the past couple months. With signs of sales increasing, we’re beginning to see a glimmer of hope from our very slowly growing economy. Perhaps due to the falling gas prices, retail sales grew 1.1% last month while existing home sales jumped 7.7%. We also saw a slight increase in the Leading Economic Indicators and manufacturing activity, while unemployment remained stable for another week.
Additionally, the Fed released its minutes from their last meeting, revealing that Operation Twist was not universally welcomed. There still are many things that need to be done to help the recovering economy; however the Fed is unable to do everything necessary.
This week, concentrate on the Industrial Production and Consumer Price Index as a spike in either report would raise rates immensely. In addition, rates would also be pushed up if we continue to receive good news from Europe. However, moderate changes in the Producer Price Index and the Leading Economic Indicators could help keep rates lower.