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This week, mortgage applications increased 16.8 percent; homeowners are rushing to refinance now that rates have dropped; 90% of metro areas experienced home price gains in the second quarter; delinquencies also increased in Q2 and research shows that the housing market is moving in a more buyer-friendly direction as new listings are back up, inventory continues to grow, time on the market is stretching and listing prices continue to stall.

Mortgage Applications Increase in Latest MBA Weekly Survey
Mortgage Bankers Association - 8/14/2024
Mortgage applications increased 16.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Applications Survey for the week ending August 9, 2024.

Homeowners are rushing to refinance their mortgages after rates finally dropped
CNN Business - 8/15/2024
The 30-year fixed-rate mortgage averaged 6.49% this week. That’s still well below this year’s peak and the two-decade high last fall, but it appears to be enough to entice homeowners to refinance.

National Housing & Economic Forecast 2024 Midyear Update: Long-Awaited Mortgage Rate Relief Finally Arrives
Realtor.com - 8/14/2024
The next six months should bring some welcome relief to homebuyers and sellers in the form of lower mortgage rates, according to the Realtor.com midyear housing forecast for 2024.

Weekly Housing Trends View — Data for Week Ending August 10, 2024
Realtor.com - 8/15/2024
The housing market continued to move toward a more buyer-friendly direction. In addition to mortgage rate relief, inventory continues to increase, time on the market continues to lengthen and listing prices are stalling.

Mortgage Delinquencies Increase in the Second Quarter of 2024
Mortgage Bankers Association - 8/15/2024
The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 3.97 percent of all loans outstanding at the end of the second quarter of 2024.

Competition, Price Appreciation Tapered Off In July
National Mortgage Professional - 8/15/2024
Competition for homes and price appreciation tapered off faster than normal in July as high housing costs continued to stymie shoppers, according to recent data from Zillow.

Home prices surge across U.S. cities
Mortgage Professional America - 8/14/2024
The U.S. housing market saw nearly 90% of metro areas experiencing home price gains in the second quarter of 2024, according to the latest report from the National Association of Realtors.

Experts Predict What the Real Estate Market Will Look Like Once Mortgage Rates Drop
Realtor.com - 8/13/2024
Realtor.com senior economist Ralph McLaughlin expects mortgage rates to drop further in September and December, which is “encouraging news for potential homebuyers who have been waiting to participate in the market.”

Home Prices In Silicon Valley Area Top $2 Million For First Time
Financial Advisor - 8/13/2024
The median home price in San Jose topped $2 million in the second quarter, the first time a U.S. metropolitan area has exceeded that threshold and a symptom of the nation’s persistent affordability challenge.

July Refinance Activity, Rate Lock Volume See Increases
National Mortgage Professional - 8/12/2024
Mortgage refinance demand increased to levels not seen since September 2022 amid softening interest rates, as reported by Optimal Blue in its July 2024 Market Advantage mortgage data report.

This week, mortgage rates decreased to their lowest level in a year; mortgage applications and credit availability increased; home appreciation slowed significantly; more Americans are tapping into home equity credit lines; and research shows that new listings are back up, inventory continues to grow, time on market is stretching and listing prices continue to stall.

Mortgage Rates Decrease To Lowest Level In Over A Year
National Mortgage Professional - 8/8/2024
Freddie Mac today released the results of its Primary Mortgage Market Survey, showing the 30-year fixed-rate mortgage averaged 6.47%, down from last week's 6.73%. Today's rates mark the lowest level in a year.

Mortgage Applications Increase in Latest MBA Weekly Survey
Mortgage Bankers Association - 8/7/2024
Mortgage applications increased 6.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Applications Survey for the week ending August 2, 2024.

Weekly Housing Trends View — Data for Week Ending August 3, 2024
Realtor.com - 8/8/2024
New listings are back up, inventory continues to grow, time on market is stretching and listing prices continue to stall.

Mortgage Credit Availability Increased in July
Mortgage Bankers Association - 8/8/2024
Overall credit availability grew to its highest level since October 2023, driven by increased conventional loan offerings such as ARMs and cash-out refinance loans.

CoreLogic: Home Price Appreciation Slowed Significantly in June
MortgageOrb - 8/6/2024
Month-over-month, home prices increased 0.3% compared with May, and were up only 4.7% year-over-year.

More Americans Are Tapping Home Equity Credit Lines, N.Y. Fed Says
Financial Advisor - 8/6/2024
Balances on home equity lines of credit rose to $380 billion, representing the ninth consecutive increase, according to the Federal Reserve Bank of New York’s Quarterly Report on Household Debt and Credit.

Fannie Mae HPSI Shows Signs Of Souring Consumer Sentiment
National Mortgage Professional - 8/7/2024
The July 2024 Home Purchase Sentiment Index decreased by 1.1 points in July to 71.5. This month, only 17% of consumers indicated that it's a good time to buy a home, down from 19% in June.

The housing market just reached an incredible milestone
CNN Business - 8/8/2024
The total value of the housing market now exceeds $1 trillion in eight U.S. cities, doubling from just four cities last year and underscoring just how much home prices have skyrocketed in a relatively short time, according to Redfin.

Mortgage Lock-Ins Cost U.S. Economy $20 Billion In One Year
Financial Advisor - 8/8/2024
Mortgage-rate lock-ins cost the U.S. economy $20 billion over a one-year period starting in 2022, according to the National Bureau of Economic Research. That tallies to some $296 of economic cost per household.

A $1 Trillion Time Bomb Is Ticking In The Housing Market
Financial Advisor - 8/2/2024
U.S. homeowners’ wildfire and flood risks are underinsured by $28.7 billion a year. As a result, more than 17 million homes are at risk of suffering what could total $1.2 trillion in value destruction.

This week, housing inventory surged by 36.6 percent; home equity improved after three quarterly declines; mortgage applications decreased; home sales rose 4.8 percent in June; U.S. home prices hit their highest level in history in May; homeownership for people under the age of 35 decreased to 37.4 percent in the second quarter and housing affordability appears to be moving in the right direction.

Housing Inventory Surges to Post-Pandemic High in July
The Mortgage Reports - 8/1/2024
While the supply of for-sale homes still lags pre-pandemic totals, signals point to a recovery underway. The count of active listings spiked 36.6% annually in July, according to Realtor.com.

Homeowner equity turns corner after three quarterly declines
Mortgage Professional America - 8/1/2024
A report from ATTOM found that 49.2% of mortgaged homes in the U.S. were considered “equity-rich” in the second quarter, meaning homeowners had at least twice the equity of their mortgage balance.

Mortgage Applications Decrease in Latest MBA Weekly Survey
Mortgage Bankers Association - 7/31/2024
Mortgage applications decreased 3.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Applications Survey for the week ending July 26, 2024.

Weekly Housing Trends View — Data for Week Ending July 27, 2024
Realtor.com - 8/1/2024
The housing market is showing subtle signs of change this week, with new listings falling, total inventory growing and homes spending longer on the market.

Pending Home Sales Rose 4.8% in June
National Association Of Realtors - 7/31/2024
Pending home sales in June ascended 4.8%, according to the National Association of Realtors. All four U.S. regions posted monthly gains in transactions.

Case-Shiller: U.S. Home Prices Hit Highest Level in History in May
MortgageOrb - 7/30/2024
U.S. home prices continued to shatter records in May, rising 0.3% on a seasonally adjusted basis compared with April to reach the highest level in history, according to the S&P CoreLogic Case-Shiller home price index.

Housing Affordability Improves In June, Lags Year Over Year
National Mortgage Professional - 7/30/2024
First American Data & Analytics House Price Index indicated that although affordability improved on a monthly basis, it declined roughly 4% annually.

Home Equity Lending Volume Stays Relatively Flat in 2023, Debt Outstanding Increases
Mortgage Bankers Association - 7/29/2024
Total originations of open-ended Home Equity Lines of Credit and closed-end home equity loans increased in 2023 by 1.5 percent compared to the previous year, while debt outstandings increased 8.3 percent.

Lowest Homeownership Rate for Younger Householders in Four Years
Eye On Housing - 7/31/2024
The homeownership rate for the head of households (householders) under the age of 35 decreased to 37.4% in the second quarter of 2024, according to the Census’s Housing Vacancies and Homeownership Survey.

Housing affordability is ‘moving in the right direction,’ economist says. Here’s what to know
CNBC - 7/30/2024
Home affordability has slightly improved for buyers this summer, according to a recent report.

The housing market remained stable this week, although affordability remains a problem; mortgage applications decreased; existing home sales slipped 5.4 percent; housing inventory continues to grow, although nearly two-thirds of homes on the market had been listed for at least 30 days without going under contract; 56,000 home purchases were canceled last month and home price growth is slowing but expected to moderate.

Weekly Housing Trends View — Data for Week Ending July 20, 2024
Realtor.com - 7/25/2024
The housing market has been stable in recent weeks, with pricing flat, listings increasing and longer time on market. However, affordability continues to pose challenges to home buyers, leading existing-home sales to slip in June.

Mortgage Applications Decrease in Latest MBA Weekly Survey
Mortgage Bankers Association - 7/24/2024
Mortgage applications decreased 2.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Applications Survey for the week ending July 19, 2024.

Existing-Home Sales Slipped 5.4% in June; Median Sales Price Jumps to Record High of $426,900
National Association of Realtors - 7/23/2024
Existing-home sales fell in June as the median sales price climbed to the highest price ever recorded for the second consecutive month, according to the National Association of Realtors.

New home sales dip in June; Buyers wait for lower rates
Realtor.com - 7/24/2024
New home sales dipped 0.6% lower in June, dropping from May’s upwardly revised rate to 617,000 annual new home sales.

Report: Houses Gathering Dust On Market As Unsold Inventory Grows
MortgagePoint - 7/24/2024
Nearly two-thirds (64.7%) of homes on the market in June had been listed for at least 30 days without going under contract, according to a new report from Redfin.

Mortgage Application Payments Decreased 2.4 Percent to $2,167 in June
Mortgage Bankers Association - 7/25/2024
Homebuyer affordability conditions improved for the second straight month as declining mortgage rates continue to increase purchasing power and is enticing some borrowers back into the housing market.

Home Price Growth Expected To Moderate
National Mortgage Professional - 7/23/2024
Fannie Mae and Redfin both forecast home price growth slowing in latest reports.

Home Deals Fell Apart At A Record Rate For June, Redfin Says
Financial Advisor - 7/23/2024
Nearly 56,000 home purchases were canceled last month, equal to about 15% of all homes that went under contract that month, Redfin Corp. reported Tuesday.

The worst may be over for homebuyers
CNN Business - 7/23/2024
Americans have been feeling overwhelmingly dejected about their prospects of buying a home. But there are now signs that maybe, just maybe, the worst could be over for homebuyers.

Some renters may be ‘mortgage-ready’ and not know it. Here’s how to tell
CNBC - 7/18/2024
Millions of renter households in 2022 would have been able to buy a house that year, according to a new analysis by Zillow.

This week saw an increase in mortgage applications; national house price growth slowed for the sixth consecutive month; foreclosure filings decreased in Q1; home prices show signs of slowing down; the market remains in a holding pattern and builder confidence has fallen slightly.

June New Home Purchase Mortgage Applications Increased 0.7 Percent
Mortgage Bankers Association - 7/18/2024
Applications for new home purchases slowed in June, consistent with broader declines in single-family construction and new building permits as well as typical seasonal patterns.

National House Price Growth Slows For Sixth Consecutive Month
National Mortgage Professional - 7/16/2024
House prices nationally are now 54.7% higher compared to pre-pandemic levels, according to the June 2024 Home Price Index report from First American Data & Analytics.

Mortgage Applications Increase in Latest MBA Weekly Survey
Mortgage Bankers Association - 7/17/2024
Mortgage applications increased 3.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Applications Survey for the week ending July 12, 2024.

Weekly Housing Trends View — Data for Week Ending July 13, 2024
Realtor.com - 7/18/2024
This week’s data revealed a housing market in a holding pattern with no price growth, a slower market and more price reductions.

ATTOM: Foreclosure Filings Decreased in the First Half
MortgageOrb - 7/12/2024
A total of 177,431 U.S. properties saw foreclosure filings — default notices, scheduled auctions or bank repossessions — in the first six months of 2024, according to ATTOM.

Fannie Mae: Home Prices Show Signs Of Slowing
National Mortgage Professional - 7/18/2024
Single-family home prices saw a year-over-year increase of 6.9% in Q2 2024, per Fannie's latest Home Price Index.

Single-Family Starts Weaken in June
Eye On Housing - 7/17/2024
Overall housing starts increased 3.0% in June to a seasonally adjusted annual rate of 1.35 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

U.S. Home Appraisals Were Higher Than Sale Prices 51 Percent of the Time in First Half
MortgageOrb - 7/16/2024
The gap between appraisals and sale prices is the highest that it has been since the start of the pandemic in 2020, according to a report from Corporate Settlement Solutions.

The housing market, explained in 6 charts
CNBC - 7/13/2024
The housing market looks far different than it did when the pandemic was just starting. These charts help explain why.

Builder Confidence Falls Slightly in July
National Mortgage Professional - 7/17/2024
Builder confidence in the market for newly built single-family homes was 42 in July, down one point from June, according to the National Association of Home Builders/Wells Fargo Housing Market Index.

This week saw a decrease in mortgage applications; homebuyer sentiment is on the rise; homeownership became less affordable in Q2; the number of homes actively for sale was notably higher compared with last year; and housing inflation remains stubbornly high.

Mortgage Applications Decrease in Latest MBA Weekly Survey
Mortgage Bankers Association - 7/10/2024
Mortgage applications decreased 0.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Applications Survey for the week ending July 5, 2024.

Weekly Housing Trends View — Data for Week Ending July 6, 2024
Realtor.com - 7/11/2024
This week’s data revealed a sluggish housing market, with both sellers and buyers easing off due to Independence Day. Fewer sellers listed new homes, and properties stayed on the market longer.

Report: Homebuyer Sentiment On The Rise
MortgagePoint - 7/8/2024
Fannie Mae’s latest Home Purchase Sentiment Index rose 3.2 points in June to 72.6, rebounding from last month’s dip and returning the Index nearer the plateau it set earlier this year.

ATTOM: Homeownership Became Less Affordable in Q2
MortgageOrb - 7/8/2024
Major homeownership expenses – including mortgage payments, property taxes and insurance – now consume about 35% of the average wage nationwide, according to ATTOM’s U.S. Home Affordability Report.

Mortgage Credit Availability Increased in June
Mortgage Bankers Association - 7/11/2024
Mortgage credit availability increased in June for the sixth consecutive month, as lenders expanded their offerings of cash-out refinance loan programs.

June 2024 Monthly Housing Market Trends Report
Realtor.com - 7/9/2024
The number of homes actively for sale was notably higher compared with last year, growing by 36.7%, an eighth straight month of growth.

Here’s why housing inflation is still stubbornly high
CNBC - 7/11/2024
Housing accounts for 36% of the CPI index, since it’s the biggest expense for the average household. Movements in shelter prices therefore have an outsized influence on inflation readings.

Rising Home Values Are Driving Property Taxes Higher — These States Are Trying to Do Something About It
Realtor.com - 7/8/2024
Several states are pursuing measures to limit the pain for homeowners by limiting annual increases to property tax revenue collections or assessment values.

Gen Z homebuyers defy 20% down payment norm
Mortgage Professional America - 7/11/2024
Homeownership is becoming increasingly expensive, but younger generations entering the housing market are finding new strategies to cope with low down payment options, a new TD Bank survey has revealed.

It suddenly looks like there are too many homes for sale. Here’s why that’s not quite right
CNBC - 7/9/2024
There is currently a 4.4-month supply of both new and existing homes for sale, according to the National Association of Home Builders, or NAHB.

This past week interest rates moved lower, approaching levels last seen in March. Let's discuss why and look into the week ahead.

One or Two?

At the recent Fed meeting, the big surprise was Fed Chair Powell suggesting there would no longer be a rate cut in 2024, two less than previous forecasts just three months ago. Why? The Fed sees inflation running hotter than expected, and for this reason, they only see one rate cut this year.

However, despite the Federal Reserve being correct about the "higher for longer" path of interest rates over the last couple of years, the financial markets and many on Wall Street see the Fed cutting twice. One could be as soon as September, followed by another in November.

Why the Disconnect?

The economy is decelerating, and there are more signs that the consumer is slowing its spending. Consumer spending makes up two-thirds of our economic growth. So, if the consumer retreats, our economy can't grow. And if our economy is not growing, unemployment rises, and a recession follows. A scenario where the consumer retreats and unemployment rises faster than expected would be a worst-case scenario for the Fed. They are trying to engineer a "soft landing", where they keep rates higher for longer and slowly lower rates with little disruption to economic activity.

The Canary in the Coal Mine

If consumer spending is critical to economic growth, then Retail Sales is an important figure to watch. This past week the headline number for Retail Sales was very disappointing. It also included downward revisions to previous figures. But the most concerning part is when you adjust Retail Sales for inflation. In doing so we learn that real Retail Sales have turned negative. Meaning we are not buying more goods; we are simply paying more. History has shown that when real Retail Sales flat line and turn negative it ultimately leads to a recession.

Housing Starts and Permits Fall Sharply

In May both Housing Starts and Permits came in well below expectations. The soft reading highlights the impact of elevated rates and affordability restraining building activity. Upon anticipated rate relief from a slowing economy and Fed rates cut, this story can and likely will change quickly.

Look Around

With all the noise and revisions from economic reports, sometimes it's good to just look around and see what is happening and get a sense of the economy. For instance, in recent weeks McDonald's, Starbucks and other corporations have installed "value meals" or reduced-price offerings to attract consumers. In the case of Starbucks, they recently reported a decline in foot traffic. The Fed wants to see this as it helps lower inflation, but they also do not want to see too much of it as it could lead to a recession down the road.

Unexpected Weakness

The Fed said rates are higher for longer unless they see "unexpected weakness" in the labor market. As we continue through the Summer, we need to track the labor market readings closely. If they show "unexpected weakness", that will likely be the deciding factor for the Fed to cut rates sooner and maybe more than they recently suggested. At the moment, Initial Claims, which is a leading indicator of the health of the labor market, is showing a large weekly increase in people filing for first-time unemployment benefits. Also, within the latest jobs report, we are seeing hires and quits near pre-pandemic levels as they continue to decline.

Bottom line: The recent weakness shown in the labor market and economic reports are somewhat welcome by the Fed, as they feel this will continue to push inflation lower. Moving forward it would not be a surprise to see continued.

This past week the Federal Reserve decided not to cut rates and shared their updated forecast on the economy. Let's discuss what was said and what's ahead for the upcoming week.

Higher for Longer Continues

The Federal Reserve met last Wednesday and once again decided to make no change to interest rates. The markets widely expected this, but what caught many off guard was the Fed's updated summary of economic projections.

This is where the Fed gives its quarterly update on where it sees unemployment, economic growth (Gross Domestic Product), inflation, and where interest rates are headed for the next couple of years. There were a couple of big surprises. First, the Fed believes inflation may not come down any further for the rest of the year. And because of this, the Fed lowered its forecast of interest rate cuts from three this year to just one.

At the same time, they maintained their forecast for economic growth and the unemployment rate which are expected to come in at 2.1% and 4%, respectively, at year's end.

Hawkish Press Conference

Thirty minutes after the Fed statement was released, Fed Chair Powell held a press conference, and here he amplified the position of keeping rates higher longer until inflation moves sustainably towards their goal of 2%.

Despite acknowledging that the jobs report likely overstated the strength of the labor market, the sector market remains tight with unemployment at historically low levels. Mr. Powell also shared he sees no recession on the horizon.

CPI and PPI Come in Low

The Fed calling for inflation to potentially rise from current levels took some of the shine from the low Consumer Price and Producer Price Index for May readings midweek. Inflation readings with or without energy could likely be a one-off in May, as oil prices are already up 10% in June near $80 a barrel.

Bottom line: The near-term outlook for rates is uncertain now that the Fed said it's still higher for longer. Longer-term rates should continue to gradually move lower as the economy continues to cool and unemployment rises.

Interest rates dropped to the lowest levels in the last two months. Let's discuss why and what's next.

Economic Deceleration

In the past couple of weeks, there have been many economic readings revealing that the economy is slowing. Our gross domestic product (GDP) for the first quarter was revised lower to 1.3%. Coming on the heels of 4.9% and 3.5% for both the third and fourth quarters of 2023, this highlights an economic slowdown. There was also growing sentiment that the second quarter would rebound sharply from the 1.3% reading. However, the Atlanta Fed poured cold water on that idea. They significantly lowered their forecast for the second quarter from over 4% to 1.8%. This downward revision caught the financial markets by surprise, and interest rates declined sharply in response.

Manufacturing Not Manufacturing

Another sour reading on the economy was the Institute of Supply Management (ISM) Manufacturing Index. This report indicates a contraction or absence of manufacturing. This means that people are losing jobs in this sector, which is never a good thing. Bonds like bad news, and this bad news helped bonds last week.

Help Wanted Signs Disappear

The JOLTS report showed that help-wanted signs continue to disappear, meaning there are fewer jobs available and highlighting the loosening in our labor market. Currently, there are just over 8 million jobs available, the lowest reading in three years and well off the high of 11 million seen a few years ago.

This is an important figure to watch because if there are fewer jobs available, people are less likely to quit and are not in any position to demand higher wages, which feeds inflation. This is another case where bad news helps bonds because it fuels the idea that a Fed rate cut could come sooner rather than later.

Unexpected Weakness

Interest rates still have the overhang of debt and inflation pressures, which hurt rates. However, Fed Chair Powell said at the previous Fed meeting that they will not have an appetite to cut rates unless they see "unexpected weakness" in the labor market. We may very well be seeing that unexpected weakness happening now. A Fed cut may be on the near-term horizon if labor market prints continue to show weakening signals.

4.29%

The 10-year Note, which ebbs and flows with mortgage rates, declined to 4.29% last week, the lowest level since early April. Moreover, the yield pushed beneath its important 200-day Moving Average. If the 10-year Note can get comfortable under its 200-day Moving Average, it could lead to stable to lower rates ahead.

Oil is Lower

Another metric to watch in determining where rates are headed is the price of oil. Oil prices have declined sharply in the last couple of weeks, in tandem with interest rates. This is on the perceived notion of an economic slowdown here and abroad.

Bottom line: The winds have changed in bonds' favor over the past two weeks as a slew of bad economic news has hit the market. It also appears that "bad news is finally bad news," meaning that it supports lower rates.

This past week interest rates moved sharply higher in response to a host of unfriendly bond news. Let's discuss what happened and what to watch for in the weeks ahead.

We Need More Revenue

This past week was shortened due to the Memorial Day holiday, but it was filled with tall problems which caused rates to spike. It all started on the Friday before Memorial Day when Treasury Secretary Janet Yellen told the world that the path for rates is higher, and we need more revenue.

This was an important statement as it highlights our deficit spending and our need to sell more treasury debt to fund our government.

The debt sales were tested this past week and ended up being a main driver for the spike higher in interest rates. The Treasury sold $183B worth of 2,5 and 7-yr Notes and the auction results were poor where buyers demanded higher interest rates to purchase all the debt. As Treasury yields move higher, mortgage-backed security prices drop, thereby elevating home loan rates.

Higher For Longer

Since the Fed Meeting back on May 1st, where the Fed Chair Powell said they are not hiking or cutting rates, many officials have since been pouring cold water on the idea that a rate cut is coming soon.

This past week, we heard comments like "Don't count out a rate hike" as the next move and "higher indefinitely" was uttered by another Fed official. This means those betting on a rate cut soon might want to reassess their position as the chance for the first cut has now been pushed back to November. And as we have seen over the last year or so, if inflation remains stubbornly high, we may not see a cut at all in 2024.

Higher Oil

Yet another problem for interest rates and the overall economy is energy prices. Oil hit $80 a barrel last week. This is significant as oil and 30-year mortgage rates tend to ebb and flow together. When oil prices edge higher so do mortgage rates. Why?

High oil prices are inflationary. If inflation readings remain near current levels or even edge higher, there is no way the Fed can cut interest rates which means higher for longer.

Consumer Sentiment Moves Higher

Bonds hate inflation, bonds hate more bonds and bonds hate good news. Despite the uncertainty about higher interest rates and elevated oil prices, the consumer sentiment reading last week was an upside surprise as people felt a bit more optimistic - breaking a trend of recent pessimism.

Bottom line: We should take the Fed at its word that rates will be higher for longer. Deficit spending and high energy prices will help fuel this notion.