Goldcoast Funding Group

Recession Fears Renewed Recession fears were back in full swing this past week, thanks to the weakest manufacturing report since June 2009, which was the last month of the Great Recession. Manufacturing makes up 12% of our economy, while consumer spending makes up nearly 70%. So even though the consumer remains strong, markets were spooked that this is the first sign of cracks within the U.S. economy. Trade uncertainty, increased tariffs, and softening demand were reasons cit...ed by respondents for the soft reading. Stocks hate bad news, uncertainty, and recession talk, so the initial reaction was a significant Stock selloff. Typically, when Stocks struggle, Bonds and home loan rates benefit, but the improvements were modest at best. Here are three reasons rates have seemed to stall think of a wait and see attitude. 1. Markets are looking for confirmation of a slowdown in other parts of economy, besides manufacturing. 2. The Fed is going to cut rates, likely two times before year-end to help the economy grow. 3. U.S./China trade talks carry potential positive headline risk. How the economy performs in the months ahead and responds to pending Fed rate cuts will likely determine which path home loan rates will follow. But the biggest story and wild card heading into October will be the U.S./China trade talks. Positive developments can change everything in a minute and home loan rates could suffer. And the opposite is also true. Bottom line: For those looking to take out a mortgage, it’s tough to see a better situation for the consumer. The economy remains strong and rates are at three-year lows. In order for rates to get much better, the economy would likely have to perform worse, potentially much worsewhich could happen, but let’s not wish for it. Tagged Market Trends

The Federal Reserve's decision to cut interest rates by 25 basis points is the first time over a decade. The decision by the Fed means consumers will get a reprieve in the ever escalating borrowing costs ....

What a difference a month makes. In May, stocks fell sharply, and interest rates declined each week. June has been a different story. The Fed has signaled rate cuts are likely coming. Stocks have been rallying higher, and the decline in interest rates has stalled. The Fed can’t control home loan rates. Those move mainly on inflation and expectations of inflation in the future. Inflation has remained tame for the past decade and is the main reason why home loan rates have stay...ed low as well. This past week, we received another reading on consumer inflation, the Consumer Price Index (CPI), which confirmed there are no price pressures or inflation threat to the economy. The result: the odds of a Fed rate cut have climbed to 85% for the July Fed Meeting on the idea that the Fed can comfortably cut rates and allow inflation to creep into the economy. Also keeping home loan rates near two-year lows is the uncertainty and lack of resolution with the US/China trade turmoil. The next step is a potential meeting between US and China at the G20 Meeting June 28-29. Mark your calendar. This is an important event, because as this trade dispute goes so do the economies around the globe. Bottom line we are seeing a strong economy, rising stocks, and two-year lows for home loan rates.