|Mixed Messages from Fed|
|The economic data had little impact on mortgage rates over the past week. Mixed messages from the Fed caused some movement. For the week, mortgage rates ended just slightly higher.|
|Mortgage rates responded to comments from several Fed officials, creating some volatility during the week. By the end of the week, though, investors were left with the impression that Fed officials have a wide range of opinions about the appropriate timing to tighten monetary policy. As a result, there was little net change in either the outlook for future Fed policy or in mortgage rates.|
|The mixed messages began on Tuesday with a speech from the Fed’s Dudley that was unexpectedly hawkish. He suggested that Fed rate hikes may come sooner than investors expect. Wednesday’s release of the minutes from the July 24 Fed meeting revealed conflicting views on the outlook for inflation and the degree of support for tighter monetary policy. Thursday’s comments from the Fed’s Bullard were very dovish. He said that one federal funds rate hike is all that will be needed for the "foreseeable future."|
|Looking ahead, the report on new home sales will come out on Tuesday and the report on existing home sales on Wednesday. Durable orders, an important indicator of economic activity, will be released on Thursday. The second estimate of second quarter GDP, the broadest measure of economic activity, will come out on Friday. In addition, Fed Chair Yellen will be speaking at Jackson Hole on Friday. Investors will be looking for additional guidance about future Fed policy.|
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