Good morning folks,
The Producer Price Index fell .06% while the Core CPI rose by .01%.
Wholesale Prices Fall
I have attached the WSJ’s explanation of the PPI with a couple of nice charts.
As expected yesterday, the Fed left rates unchanged. Of more interest is the fact that they will end their purchase of mortgage backed securities at the end of March, raising fears of higher interest rates.
Some analysts have worried that the end to the Fed's mortgage buying could raise mortgage rates. So far that hasn't happened. Rates on 30-year mortgages have fallen to around 5.05% from 5.28% at the start of the year, according to research firm HSH Associates, even as Fed officials telegraphed the program would end soon.
Other long-term interest rates have been stable. Yields on 10-year Treasury notes have hovered between 3.6% and 3.8% this year.
"Mortgage rates won't move appreciably," said Scott Simon, a managing director at Pacific Investment Management Company, a big mortgage securities investor. He said private investors, who stepped aside when the Fed jumped into the market, are ready to return.
WSJ's Emma Moody joins the News Hub to discuss today's market reaction to the Federal Reserve's decision to end Mortgage Buys and to keep interest rates historically low for an extended period.
It is not as though credit is all of the sudden going to become much more difficult to get. The big problem for the housing market is unemployment," Mr. Simon said.Look for the CPI tomorrow along with first claims for unemployment.
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