Mortgage rates are up today after the release of today's stronger than expected economic data. The Chicago PMI national manufacturing index rose to 60.4, above the consensus forecast of 56.0. Weekly Jobless Claims fell to 453K, below the consensus of 460K. Second quarter GDP was revised slightly higher than expected to 1.7%.

No economic data was released today. A series of Fed officials shared different viewpoints on the possibility of additional Fed purchases of Treasuries. Fed officials appear to be divided about both the need and the effectiveness of buying bonds to stimulate the economy. A flexible program to purchase smaller quantities might be an appealing middle ground. Demand was stronger than average for the 7-yr Treasury auction.

The July Case-Shiller price index increased 0.6% from June, and was 3.2% higher than one year ago. The Wall Street Journal reported that Fed officials are considering a different approach if they decide to purchase more bonds to stimulate the economy. Unlike the recent massive MBS purchase program, the Fed's new plan might include smaller-scale purchases of Treasury securities with an open-ended time frame. This approach would give the Fed more flexibility to make adjustments. It would also make Fed actions harder to predict, which might add volatility to MBS markets. Consumer Confidence came in weaker than expected.

MBS prices are up +12/32 and at the high for the day. No economic data was released today. Demand was stronger than average for the 2-yr Treasury auction, which lifted MBS markets. The bid-to-cover was 3.78 and foreign investors purchased 39% of the total. The Dow is down 50 points. Tomorrow, Consumer Confidence will be released at 9:00 am. The results of the 5-yr auction will be released at noon.

Stronger than expected economic growth data has pushed rates higher this morning. August Durable Orders declined -1.3% from July, which was close to the consensus forecast. Excluding the volatile transportation component, however, durable orders rose 2.0%, which was more than expected. The Dow is up 150 points.

Weaker than expected US jobs data and fresh concerns about high debt levels in smaller European countries have helped MBS markets this morning. Weekly Jobless Claims rose to 465K, above the consensus forecast of 450K. The four-week average fell to 463K. The Dow is down 75 points.

The July FHFA home price index showed a decline of 0.5% from June, and the June figures were revised lower. The index was 3.3% lower than one year ago. The Dow is down 20 points. Tomorrow, Existing Home Sales, Jobless Claims, and Leading Indicators will be released.

Today's Fed announcement lifted MBS markets and long-term Treasury markets. As expected, the Fed made no change in the fed funds rate. Fed officials stated that they are "prepared to provide additional accommodation if needed to support the economic recovery." Investors interpreted this to mean that additional bond purchases by the Fed could take place in coming months, and the possibility of increased demand boosted MBS markets.

This morning, August Housing Starts rose 11% to an annual rate of 598K units, above the consensus forecast of 550K, and the highest level since April. Building Permits, a leading indicator, rose 2%, also beating expectations. The Dow is down 10 points. The Fed announcement will come out around 1:15. No change in the fed funds rate is expected. Recent comments have indicated that the Fed will take further stimulative action only if the economy deteriorates significantly, and the economy has been relatively stable since the last meeting. As a result, investors are mostly expecting little change in today's Fed statement.

It has been a quiet morning ahead of tomorrow's Fed meeting. The Dow is up 10 points. No economic data will be released today.

Next week

The biggest story next week will be Tuesday's Fed meeting. No change in the fed funds rate is expected, but any surprises in the Fed's statement could have a large impact on mortgage rates. Also on Tuesday, Housing Starts will be released. Existing Home Sales will come out on Thursday, along with Leading Indicators. Durable Orders, an important indicator of economic activity, and New Home Sales will be released on Friday.

This week's inflation data again shows that rising inflation is not a concern right now. Investors will be watching to see whether the Fed addresses the risk of deflation at Tuesday's FOMC meeting. The Dow is up 25 points.

Creeping Up

Rates are a little higher today on stronger than expected jobs data. Weekly Jobless Claims fell to 450K, below the consensus forecast of 460K, and the lowest level in two months. August PPI inflation increased 0.4% from July, which was slightly more than expected. Core PPI, which excludes food and energy, matched the consensus, rising at a low 1.3% annual rate. The Dow is down 50 points.

Rates will be steady from yesterday on today's economic data. August Industrial Production rose 0.2%, which was close to expectations. The Empire State regional manufacturing index fell short of expectations with a decline to 4.1. August Import Prices ex-oil rose 0.3% from July. The Dow is down 25 points. No more economic data will be released today.

Retail Sales posted their largest increase since March, beating expectations, but MBS markets moved higher, as investors shifted assets to relatively safer assets such as bonds and gold. The Dow is down 20 points. Tomorrow, Import Prices, Empire State, and Industrial Production will be released.

With little news, both MBS markets and stocks are posting gains this morning. The Dow is up 75 points. No economic data will be released today.

Week in Review

• Weekly Jobless Claims fell to the lowest level since the week ending July 10
• The July Trade Balance was -$42.8 billion, from -$49.9 billion in June
• The Beige Book reported that the economy is still growing, but with "widespread signs of deceleration"
• The Fed's Fisher expressed reluctance to ease monetary policy until fiscal policy becomes clearer

Another Up Tick

Following weak 30-yr auction results yesterday, MBS markets continued to move lower this morning and rates creeped up again. The Dow is up 25 points. No economic data will be released today.

Up Tick

Initial Jobless Claims came in much lower than the market consensus estimates and beat last week's data by 27K. This is just one week after the Unemployment Data was a little better than expectations and it pushing mortgage rates higher as investors feel that they have a reason to get out of the low to almost no yields of bonds and are getting back into stocks.

The Fed's Beige Book reported that the economy is still growing, but that there are "widespread signs of deceleration." Demand was stronger than average for the 10-yr auction. The bid-to-cover was 3.21, and foreign investors purchases 54% of the total. The Dow is up 50 points. Tomorrow, Jobless Claims and the Trade Balance will be released at 8:30 et. The results of the 30-yr auction will be released at 1:00 et.