On The Money — Mortgage rates at their highest since 2006


Mortgage rates are rising and Americans are not buying. We will also look at OPEC’s decision to cut oil production, as well as possible reasons for this week’s stock market rebound.

But first, check out the latest from President Biden hot mic moment.

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US mortgage rates at 16-year high

According to Mortgage Bankers Association (MBA) data released on Wednesday, mortgage rates hit a 16-year high last week, further dampening demand from homebuyers.

The 30-year fixed mortgage rate rose to 6.75% in the last week of September, the highest figure since 2006. Mortgage rates climbed 1.3 percentage points on seven straight weeks of increases .

  • Mortgage applications fell 14.2% from the previous week, according to the MBA.

  • Rates have more than doubled over the past year, making monthly payments much more expensive.

  • This will further depress house prices in the coming months, analysts say.

Charles see you here.


OPEC+ announces a production cut of 2 million barrels

The Organization of the Petroleum Exporting Countries (OPEC) and its oil-exporting allies announced a 2 million barrel-a-day cut in oil production on Wednesday, thwarting months of pressure from Washington to increase production and potentially a further skyrocketing gas prices.

The coalition, which includes all 13 OPEC nations and 11 non-members including Russia, made the announcement at its meeting in Vienna, the first in-person summit since the start of the COVID-19 pandemic.

  • The announced reduction is equivalent to roughly 2% of global supplies, which could lead to higher gas prices just weeks before the midterms.

  • The move comes after President Biden visited Saudi Arabia in July to directly appeal to its leaders to increase oil production.

Zack Budryk has the details here.

Read more: Democrats blast Saudis over OPEC+ decision


Here’s the reason for this week’s stock reversal

Stock markets did their best on Wednesday to sustain a two-day rally that saw some of the biggest single-day gains since April 2020, when markets initially rebounded from the early-day shutdowns of the coronavirus pandemic.

The rally earlier in the week, which saw the Dow Jones rise more than 1,500 points, was largely due to a report from the Labor Department that said high levels of employment in the US economy could be down – a sign that the Federal Reserve could potentially halt interest rate hikes to combat record inflation.

  • But additional employment data released Wednesday indicated that labor market strength may not be stabilizing.

  • Payroll services firm ADP reported Wednesday that U.S. businesses added 208,000 jobs in September, beating economists’ expectations of 4%.

Tobias Burns see you here.


World Trade Organization slashes forecast for global imports and exports

According to the World Trade Organization (WTO), global trade will lose momentum next year due to rising interest rates, dwindling energy supplies and high prices.

The WTO estimates that world merchandise trade will grow by 1% next year, down sharply from its forecast of 3.4% this spring. The organization said trade will grow 3.5% this year, up slightly from its previous estimate of 3%, but noted that the change was mainly driven by statistical revisions.

The forecast is another indicator that the global economy is slowing down.

Charles see you here.

Good to know

Elon Musk is closing a deal to buy Twitter for $44 billion, the original purchase price agreed in April, amid an intense legal battle between the two parties.

Here’s what we know about Musk’s renewed push to buy the social media giant just two weeks before a high-profile trial is to be held.

Other things we keep an eye on:

  • The proportion of Americans expecting to lose employment income over the next four weeks hit a record high in September, according to a new poll.

  • For Sen. Mitch McConnell (R-Ky.), Killing the Reform Bill Authorizing Sen. Joe Manchin (DW.Va.) was personal.

That’s all for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. Well see you tomorrow.

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