Vital Signs: Can Nerves Be Calmed about Housing?

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MEETING OF NOTE

Wednesday, Mar. 21, 9 a.m. EDT - The Federal Reserve's Federal Open Market Committee meets for a second day to discuss monetary policy. An announcement by the Fed will come around 2:15 p.m. Every economist polled by Action Economics fully expects the central bank will keep interest rates at 5.25%.

Economists will pay close attention to the post-meeting press release, as some recent economic data have pointed to softer economic activity. In addition, investors are nervous that problems in the subprime mortgage market could hurt more financial companies and cause a broader hit to economic activity.

MORTGAGE APPLICATIONS - Wednesday, Mar. 21, 7 a.m. EDT

The Mortgage Bankers Association issues its weekly mortgage application volume data for home buying and refinancing activity during the week ending Mar. 16. For the week ended Mar. 9, both the purchase and refi indexes grew some more. The purchase index was 414.3, from 405.3 in the week ended Mar. 2. The refi index climbed to 2312.2, form 2234.2 in the prior week.

The four-week moving average for the purchase index rose to 400.6, from 397.2 in the prior week. The four-week average for the refi index grew to 2102.8, from 2032.6.

The pickup in activity, especially in refi applications, is being driven by lower interest rates. The average 30-year fixed-rate mortgage inched down to to 6.03% from 6.04% in the week ended Mar. 2.

MEETING OF NOTE

Thursday, Mar. 22, 12 p.m. EDT - Federal Reserve Bank of Richmond President Jeffrey Lacker gives the opening remarks ahead of Federal Reserve Board Governor Randall Kroszner's keynote speech at the Credit Markets Symposium hosted by the Richmond Federal Reserve Bank in Charlotte, N.C.

JOBLESS CLAIMS - Thursday, Mar. 22, 8:30 a.m. EDT

Jobless claims retreated in the week ended Mar. 10, to 318,000. In the prior week, claims eased to an upwardly revised 330,000, from an originally reported 328,000. The four-week moving average fell to 329,250, from 339,500 in the week ended Mar. 3. Continuing jobless claims for the week ended Mar. 3 moved up to 2.57 million, from 2.53 million in the week ended Feb. 24.

LEADING INDICATORS - Thursday, Mar. 22, 10 a.m. EDT

The Conference Board's composite index of leading economic indicators probably held steady in February, after ticking up 0.1% in January. The index is just off 0.1% from a year ago.

The index will get some support from stock prices. Over the entire month of February, the Standard & Poor's 500 stock index averaged a higher level vs. January. Higher weekly jobless claims levels, weaker consumer expectations, and quicker delivery times to manufacturers as reported in the Institute for Supply Management's factory activity report will help to offset the positive contribution from stocks.