Congress is back in session. Not that we are 100% sure that anyone missed them, but certainly there is some unfinished business on the table. For the past few weeks, international news has dominated the markets. Syria, Afghanistan, North Korea and Russia have led this domination, and certainly these world conflicts have influenced the markets — including stocks, bonds, energy prices and the price of gold.
This is not to say that domestic issues have fallen off the map, but when Congress is not in town, there will not be news of legislative progress or failures in the headlines. Now that Congress is back, there will be issues that need to be addressed on the domestic side, in addition to Congressional activity on international issues. One domestic issue hits this very week. This Friday, the stopgap funding bill for the operation of the Federal Government expires. Could we see a government shutdown?
Most political analysts predict that a shutdown will not take place. However, it is normal for the agreement to come at the last possible hour. And international issues may complicate the agreement with budget requests in place to increase defense spending with a lack of immediate corresponding cuts in domestic programs. While these issues are usually resolved before the government is shut down for anything but a minimal length of time, there is the potential for fireworks and saber-rattling. And if the government does shut down for a few days, could next week’s meeting of the Federal Reserve Board’s Open Market Committee be delayed? Always an interesting time in Washington.
The Weekly Market Update
Rates on 30-year fixed loans fell below the 4.0% mark this past week for the first time this year. For the week ending April 20, Freddie Mac announced that 30-year fixed rates fell to 3.97% from 4.08% the week before. The average for 15-year loans decreased to 3.23%, and the average for five-year adjustables moved down to 3.10%. A year ago, 30-year fixed rates averaged 3.59%.
Attributed to Sean Becketti, chief economist, Freddie Mac -- "The rate on 30-year loans fell 11 basis points this week to 3.97%, dropping below the psychologically-important 4.0% level for the first time since November. Weak economic data and growing international tensions are driving investors out of riskier sectors and into Treasury securities. This shift in investment sentiment has propelled rates lower."
Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.