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Valley Central Bank

Bob Paola
Vice President- Residential Lending
NMLS #754101
Valley Central Bank
8160 Corporate Park Drive, Suite 135
Cincinnati, OH 45242
Office: 513-868-5357
Cell: 513-702-2029
E-Mail: bpaola@valleycentral.org

Bob Paola

For the week of Oct 22, 2018 | Vol. 16, Issue 43

 

 

 

In This Issue  

 

 

 

 

 

Last Week in Review: Rates hit seven-year highs midweek on the heels of a confusing Fed message.

Forecast for the Week: US economic growth is front and center with 3rd Quarter GDP hitting the wires.

View: Keep in Touch with Previous Clients with These Creative Tips.

 

 

 

 

 

 


Last Week in Review  

 

 

 

 

 

"Now did you read the news today. They say that danger's gone away." Land of Confusion by Genesis.

Our Federal Reserve has a dual mandate - to maintain price stability (inflation) and maximum employment. They also have a 3rd "unstated" mandate, which is to maintain market calm.

This past week, the Fed came up a bit short on that "unstated" mandate and created quite a bit of confusion and market turmoil midweek upon releasing the Minutes from the Sept 26th Fed meeting.

In that meeting we learned there is a group of "hawkish" Fed Members that want to hike the Fed Funds Rate more aggressively into 2019. At the same time, there were other Fed members who think the current Fed Funds Rates is "about right" - meaning no more hikes for now. The Fed talking out of both sides of their mouth was a source of confusion for the markets and home loan rates.

Adding to the confusion is the Fed's very own inflation forecast which suggests inflation will remain close to current levels through 2021. If we recall the Fed mandate to maintain price stability, one could argue there is no need to raise the Fed Funds Rate if inflation is not rising.

Food for thought - If the Fed's modest inflation forecast comes to pass, we will likely see home loan rates remain near historically attractive levels.

If you or someone you know has questions about home loans, give me a call. I'd be happy to help.

 

 

 

 

 

 


Forecast for the Week  

 

 

 

 

 

As you can see, what the Fed says about the economy and inflation can have a big impact on rates and the financial markets.


This coming week may be another exciting and potentially volatile one as the Fed will see one of the more important economic reports of the month - Friday's first read on 2018 third quarter Gross Domestic Product (GDP). The second quarter saw a sharp 4.2% rise as the U.S. economy continues to strengthen with the labor market near full employment. Expectations are for a slightly slower growth rate, near 3.2% - but still quite strong.

GDP is the value of the goods and services produced in the United States. The growth rate of GDP is the most popular indicator of the nation's overall economic health.

Housing data will also be reported as the sector cools a bit and inventories rise from anemic levels seen in the past few years.

Key Economic Reports This Week

  • The economic calendar begins on Wednesday with New Home Sales, followed by Pending Home Sales on Thursday.
  • Durable Orders will be released on Thursday along with Weekly Initial Jobless Claims.
  • The big report this week will be Friday's first reading of third quarter Gross Domestic Product.

Chart: Fannie Mae 4.0% Mortgage Bond (Friday Oct 19, 2018)

Japanese Candlestick Chart

 

 

 

 

 

 



The Mortgage Market Guide View...  

 

 

 

 

 

   

 

 

 

 

Tip: Creative Ways to Keep in Touch with Your Previous Clients

Some clients need to use your services only for a short time. However, just because a client has not used your services for a while doesn't mean that they're gone for good. Many companies have won back business by showing that they are dedicated to providing the best service possible. If you're watching your clients walk away and you want to bring them back, use these five tactics to stay in touch with them.

  • Show that you remember their anniversaries, birthdays, and other important events by sending them congratulatory cards or emails. This subtle tactic allows you to express genuine emotions to your clients without giving them a hard sales pitch.

 

  • Create valuable content that your clients will want to subscribe to. If you share important insights and news that go beyond what your company does, you will build a network of people who will continue turning to you for information long after they've stopped using your services.

 

  • Organize annual events and other services that will provide value to your clients. These events and services could include an annual home fair or a one-on-one financial check-up. Efforts such as these show that you can provide value even after your services have been completed.

 

  • Personalize your communication and promotions. Take time to connect with your customers individually so that you are able to provide real value and avoid blasting all of your customers with the same impersonal message.

 

  • Promote your customers. If any of your previous customers run a useful business or service, offer to share them with your customers who might need their services. With this tactic, both businesses will benefit.

 

These are just a few pieces of advice that you can follow to win back previous clients and turn them into ambassadors who will be more likely to tell their family and friends about your services. Good client relations means more growth for your business and increased brand recognition in your community.

Sources: Inc and ExpressCopy

 

Economic Calendar for the Week of October 22 - October 26

Date

ET

Economic Report

For

Estimate

Actual

Prior

Impact

Wed. October 24

08:30

New Home Sales

Sep

NA

 

629K

Moderate

Thu. October 25

08:30

Durable Goods Orders

Sep

NA

 

4.5%

Moderate

Thu. October 25

08:30

Jobless Claims (Initial)

10/20

NA

 

NA

Moderate

Thu. October 25

10:30

Pending Home Sales

Sep

NA

 

-1.8%

Moderate

Fri. October 26

08:30

Gross Domestic Product (GDP)

Q3

NA

 

4.2%

HIGH

Fri. October 26

08:30

GDP Chain Deflator

Q3

NA

 

3.0%

HIGH

Fri. October 26

10:00

Consumer Sentiment Index (UoM)

Oct

NA

 

99.0

Moderate

 

 

 

 

 

 

 

The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.

 

As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.

 

Bob Paola
8160 Corporate Park Drive, Suite 135
Cincinnati, Ohio 45242

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