Interest rates experienced a turbulent five days last week. The week started off well reversing some of the losses from the previous three weeks, but ended badly giving back all the gains. Concern over the US debt continued, as we attempt to "buy" our way out of the recession, dragging down rates. This concern will continue and will adversely affect interest rates until we see more concrete and consistent signs that the economy is indeed turning a corner. We are seeing signs that this is happening as home sales show signs of life. But there are still many areas of the economy that don't look too good. Especially the unemployment issue. Many experts now believe that the job market will not return to "normal", with normal being unemployment in the 5-6% range, until 2012-2013. For the week, rates were unchanged.
This week promises to be a busy one. Starting today, we get Existing Home Sales and the consensus is a minor improvement over the previous report. New Home Sales will be released Wednesday, and we are also expecting a minor improvement here as well. The Fed meets Wednesday about rates, and there is no chance of any change here. The current Fed Funds Rate is at .25%. Initial Jobless Claims come out Thursday and there is little change expected here. Recent reports have shown a decrease in initial claims from week to week, but a very minimal decrease. And on Friday the University of Michigan's Consumer Confidence Report will be released and.....little to no change is expected here either. As you can see all of these reports are showing little to no change over the last reports. So a big change from the consensus, worse or better, has the potential to significantly move the market.