Good news is typically bad news for bonds and home loan rates. That has not been the trend of late, and certainly not this past week.

Durable Goods Orders is a report which shows buying demand for products with a life cycle beyond 4 years — think cars, washing machines and planes. And that buying demand of long-lasting goods is up at the highest levels since last summer, highlighting that the US economy continues to grow, and consumers and businesses feel confident in investing.

Adding to the good-news week were continued strong corporate earnings reports, and future guidance from the likes of Amazon, Microsoft and Facebook.

Finally, the first look at 1st quarter GDP showed the US economy grew at a blistering 3.2% pace — way above economists’ expectations of 1.9%. The US economy is reaccelerating.

In the face of all the good news, home loan rates held steady and remain near one-year lows.

Bottom line: when you consider the strong labor market, rising wages, growing economy, low inflation, high consumer confidence, and low rates – it truly is a Goldilocks situation in the economy and for anyone looking to buy a home.

Looking forward: the financial markets are gearing up for some volatility. This is a big news week with key readings on inflation and jobs – but most of all, it’s Fed week.

The two-day Fed meeting will kick off on Tuesday and ends Wednesday with the 2:00 p.m. ET release of the monetary policy statement. There is a near zero-percent chance of a hike to the benchmark Fed Funds Rate, currently at 2.50%.

The Fed has been quite dovish and market-friendly since the year started — will it continue? We shall find out the Fed’s take on the present state of the US economy and the future of interest rate hikes when the statement is delivered, and when Fed Chair Powell conducts a press conference at 2:30 p.m. ET following the monetary policy release. There are times when Fed Chairs say off-script remarks that can create high market volatility in stocks and rates so stay tuned.

The April Jobs Report will be released along with ADP Private Payrolls. In addition, the Fed’s favorite inflation gauge, the Core PCE, will also be reported. The Core PCE fell to 1.8% year-over-year in the last report, below the 2% target range set by the Fed. Inflation, should it remain low, will continue to keep mortgage rates at relatively low levels.

Bottom line: If there was a week where we can shift from complacency to volatility — this is it.

Reports to watch:

  • The heavy economic calendar begins on Monday with the Core PCE, Personal Income and Spending.
  • The S&P Case-Shiller 20-City Index, Pending Home Sales, Consumer Confidence and the Employment Cost Index will be delivered on Tuesday.
  • Manufacturing will be seen from the Chicago PMI on Tuesday with the national ISM Manufacturing Index on Wednesday and ISM Services on Friday.

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