Forecast for the Week

"Double dose!" is the phrase of the week, as we’ll see multiple reports this week focusing on the same segments of the economy:

We’ll start off with some big news Tuesday, when the Federal Reserve holds its FOMC meeting and releases its Policy Statement later that afternoon. As always, what the Fed says about the economy, inflation, and its Quantitative Easing program could have an impact on home loan rates.
There’s a double dose of real estate news with Wednesday’s release of data on Housing Starts and Building Permits in February. Check back with me on Wednesday to get the breakdown of how the news actually arrived!
There’s also a double dose of manufacturing news. Tuesday’s Empire State Index looks at New York State’s manufacturing sector and is a good gauge of manufacturing overall, while on Thursday we’ll also see another important manufacturing report in the Philadelphia Fed Index.
A double dose of inflation news also comes our way this week with Wednesday’s Producer Price Index Report, which highlights inflation at the wholesale level, and Thursday’s Consumer Price Index Report, measuring inflation for consumers like you and me! Remember: The Fed is intent on creating inflation, which is unfriendly to home loan rates, and signs of inflation from these reports could be unfavorable for rates.
Thursday we’ll get a read on employment with the weekly Initial Jobless Claims Report. Initial Jobless claims rose 26,000 in the latest week to 397,000, which was above expectations but still below that psychological barrier of 400,000.
Finally, on Thursday we’ll see a double dose of manufacturing data with the release of reports on Capacity Utilization and Industrial Production in February. The capacity utilization rate provides an estimate of how much factory capacity is in use. If the utilization rate climbs too high it can lead to inflationary bottlenecks in production. The Federal Reserve watches this report closely and decides how to set interest rates on the basis of whether production constraints are threatening to cause inflation.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.