This week is packed with economic reports and other events that are relevant to bond trading and mortgage rates. There are seven pieces of monthly or quarterly economic data scheduled with at least one being posted four of five days. In addition to those reports, there is also a two-day FOMC meeting and a couple of Treasury auctions that have the potential to affect bond trading enough to slightly move rates. The week’s calendar kicks off with December's New Home Sales report late Monday morning. It is considered to be the sister release to last week's Existing Home Sales, giving us a small snapshot of housing sector strength. It tracks a much smaller portion of home sales than last week's report did and is forecasted to show a decline in sales of newly constructed homes. However, this data is not important enough to heavily influence mortgage pricing unless it varies greatly from forecasts. Tuesday has two pieces of fairly important data scheduled. The first is December's Durable Goods Orders at 8:30 AM ET that helps us measure manufacturing strength by tracking new orders at U.S. factories for products that are expected to last three or more years. These are also known as big-ticket items and include things such appliances, electronics and airplanes. The data is known to be quite volatile from month- to-month, but is currently expected to show an increase in orders of approximately 2.1%. A smaller than expected increase would be considered good news for bonds and mortgage rates, but a slight variance likely will have little impact on Tuesday's mortgage pricing because of the large swings that are common in the data. Bond traders would prefer to see a large decline that would indicate economic weakness. January's Consumer Confidence Index (CCI) will also be posted at 10:00 AM ET Tuesday. This report is considered to be of moderate to high importance to the bond market and therefore can move mortgage rates if it shows any surprises. It is an indicator of consumer sentiment, which is important because waning confidence in their own financial situations usually means that consumers are less willing to make large purchases in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, market participants are very attentive to related data. Analysts are expecting to see a drop from December's reading, indicating consumer confidence was weaker than last month. A reading much smaller than the expected 77.5 would be ideal for the bond market and mortgage rates. A higher reading than forecasts would hint that consumers are more likely to spend in the immediate future, fueling economic growth and possibly pushing mortgage pricing higher Tuesday. This year's first FOMC meeting that begins Tuesday will adjourn Wednesday at 2:00 PM ET. It is expected to yield no change to short-term interest rates, but as is often the case, traders will be looking for any indication of the Fed's change in sentiment about the economy and when a potential change to short-term rates will be made or another adjustment to their current stimulus programs. This will also be current Fed Chairman Bernanke’s last FOMC meeting as chairman with current Vice Chair Janet Yellen taking over as Chairman Feb. 1st, although that shouldn’t affect this meeting’s results. There is a decent possibility of seeing afternoon volatility in the markets Wednesday due to the 2:00 PM ET post-meeting statement. Thursday has what is arguably the single most important economic report that we see regularly. This would be the initial quarterly Gross Domestic Product (GDP) reading. Thursday’s release is the first of three we will get for the 4th quarter. This data is so important because it is considered to be the best measurement of economic activity. The GDP itself is the total sum of all goods and services produced in the United States. Its results usually have a major impact on the financial markets and can cause significant changes in mortgage rates. This initial reading will be followed by two revisions, each released approximately one month apart. Last quarter's first reading, which usually carries the most significance, is expected to show the economy grew at an annual rate of 3.0%. A noticeably weaker reading would be great news for the bond market, questioning the pace of economic growth. That would likely fuel stock selling and a rally in bonds that should push mortgage rates lower Thursday morning. However, a larger than expected increase, indicating the economy was stronger than thought, will likely fuel bond selling and lead to higher mortgage rates. Also Thursday, there are two relatively important Treasury auctions for the markets to digest. The Fed will auction 5-year and 7-year Treasury Notes Thursday instead of over two days as they traditionally do. If the sales are met with a strong demand from investors, the broader bond market may improve during afternoon hours. If they draw a lackluster interest, they could lead to bond selling and higher mortgage rates mid-afternoon Thursday. Friday has the remaining three reports, starting with December's Personal Income and Outlays data at 8:30 AM ET Friday morning. It gives us an indication of consumer ability to spend and current spending habits, making it relevant to the bond market and mortgage rates. Current forecasts call for an increase in income of 0.2% meaning consumers had a little more money to spend in December than they did in November. The spending reading is also expected to rise 0.2%, indicating consumers spent a slightly more last month than the previous month. Larger increases would be good news for the stock markets and could hurt bond prices, driving mortgage rates higher. Smaller than expected increases or declines would be considered good news for the bond market and mortgage rates as it would hint that consumer spending is weaker than thought, limiting economic growth. The second release of the day will be the 4th Quarter Employment Cost Index (ECI). This index measures employer costs for employee wages and benefits, giving us an indication of the threat of wage inflation. If wages are rising, consumers have more money to spend and businesses usually need to charge more for their products and services. The report is considered moderately important and usually has more of an effect on the bond market than the stock markets. Current forecasts are showing an increase of 0.4%. A lower than expected reading would be favorable to bonds and mortgage rates Friday, but unless we see a large variance from forecasts I am not expecting this report to cause much movement in rates. The final report of the week is the revised reading to the University of Michigan's Index of Consumer Sentiment just before 10:00 AM ET Friday. This index is another measurement of consumer confidence that is thought to indicate consumer willingness to spend. I don't see this data having much of an impact on the markets or mortgage rates unless we see a large revision from the preliminary reading of 80.4. Overall, it is difficult to label any particular day this week as the most important for mortgage rates with so much going on. Wednesday is the only day with no economic data being posted, but it does have the FOMC meeting adjournment that is always big news. Thursday’s GDP report is highly important but Tuesday and Friday have multiple reports set for release that can influence mortgage rates. And stocks can affect bond trading and mortgage pricing any day, especially if they extend their significant slide from late last week. What I am fairly certain of is that we will see a very active week in mortgage rates this week. Therefore, please maintain constant contact with your mortgage professional if still floating an interest rate and closing in the near future.