The short holiday week brought a flurry of economic reports last week. Highlights included pending home sales, the S&P Case-Shiller Housing Market Indices and the FHFA home price index. No reports were released on Thursday and Friday in observance of the Thanksgiving holiday.
Last week’s economic news was dominated by the first address by the new Fed chairperson, Janet Yellen.
Fed Chair Janet Yellen‘s First Address to House
Janet Yellen addressed the House Financial Services Committee for the first time on Tuesday as Chair of the Federal Reserve.
Ms. Yellen indicated that she expected “a great deal of continuity” in terms of Federal Open Market Committee (FOMC) monetary policy direction, and noted that markets should expect the FOMC to continue its support of low interest rates.
Chairman Yellen emphasized that the FOMC’s current tapering of its quantitative easing program was expected to continue, but is not on a pre-determined course. If economic conditions change, the Fed’s monetary policy would be adjusted according to such developments.
Mortgage Rates increased a bit following her testimony as it appears some traders were expected more accommodative comments following two poor job reports.
Mortgage Rates Lower Then Higher
Mortgage rates started the week with a rally lower following weaker than expected economic data. Mortgage Rates reversed course during Janet Yellen’s testimony and finished the week higher helped by the rally in the stock market.
Weekly Jobless Claims were higher last week at 339,000 against a forecast of 330,000 new jobless claims and the prior week’s reading of 331,000 new jobless claims.
Analysts cited bad weather and the possibility of slower economic growth as factors, but said that it was too soon to tell if economic growth is slowing down.
The University of Michigan’s Consumer Sentiment Index beat expectations with a reading of 81.2 against expectations for a reading of 80.0. February’s reading was unchanged from January.
What Will Impact Mortgage Rates This Week
With a holiday shortened week we have a full slate of economic releases including inflation data with CPI and PPI along with housing data in the form of Building Permits, Housing Starts and Existing Home Sales.
The markets focus will continue to be on the Fed as Wednesday the minutes from the last FOMC meeting will be released. This will give insight to the tone of Janet Yellen’s first meeting as Fed Chair, and the reaction to the second straight dismal Non-Farm Payroll report.