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Monday, November 14, 2016

A little insight behind the housing market and interest rates

Inflation, housing and manufacturing reports will stand out in this data-rich week as the Fed 
gears up for its Federal Open Market Committee meeting in December.

Last Week in Review  
"Hey, we're headed for the future." Neil Diamond. As Americans went to the polls to exercise 
their right to vote for president, global markets took notice.

When Donald Trump was declared president elect, the market reactions overnight were as
 wild and unpredictable as the election itself. Dow futures were down more than 800 points
 in the wee hours of the morning, only to close up 250 points Wednesday. Further, the 
Dow Jones Industrial Average opened Thursday at a new all-time high.

Investors may feel the win is more Stock-market friendly with potential tax cuts, deregulation

of banks, and higher defense and infrastructure spending. There is also speculation that President-elect
Trump's anticipated policies could spur a rise in inflation.

Rallies in the Stock markets and inflationary increases both can have a negative effect on Mortgage Backed 

Securities, the type of Bond to which home loan rates are tied.

In other news, weekly Initial Jobless Claims continue to signal a robust job market. The Labor Department 

reported that the number of Americans filing for first-time unemployment benefits fell 11,000 to 254,000 
during the week ending November 5, below the 262,000 expected. First-time claims have now remained 
below the 300,000 mark for 88 consecutive weeks, a stretch not seen since 1970.

For now, home loan rates remain attractive despite edging higher recently.


Thanks to Claude Cousins at Bank of England for always keeping me 

in the economic loop.

Claude Cousins

Vice-President Bank of England Mortgage
Phone: 501-235-8890 Fax: 501-372-9801
ccousins@englending.com
englendingarkansas.com

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