Reports to Watch

The week is full of key economic data from a variety of sectors.

• Second quarter Productivity will be released Wednesday.
• On Thursday, wholesale inflation from the Producer Price Index will be released along with weekly Initial Jobless Claims.
• The Consumer Price Index will be delivered on Friday.

X Factor

Fed members continue to say that the current low inflation environment is transitory: brief, short, or ephemeral. Here today and gone tomorrow.

The Fed is targeting 2 percent as its comfort zone for inflation and gauging inflation trends by the Core Personal Consumption Expenditures (PCE) index.

Core PCE strips out volatile food and energy and has been running below 2 percent for years. Recently, Core PCE has pushed lower to 1.5 percent in June from 1.9 percent in February. In our view, years of low inflation do not conjure up the word transitory. It’s more prolonged!

In order for the Fed to adjust monetary policy by raising the short-term Fed Funds Rate, inflation will have to push higher. We don’t see that happening anytime soon and shall see where inflation is headed with this week’s numbers from the Producer Price Index and Consumer Price Index.

As always, stay glued to the Mortgage Market Guide as we steer you through economic news and the markets’ response.

For more detailed information and insight, view the Economic Calendar, the Daily Market Update and Guidance, and our exclusive Market News. And don’t forget, you can easily download the Economic Calendar to your Outlook Calendar to make sure you don’t miss important economic releases. Just click here to read instructions for downloading to Outlook.