The last week of 2013 brought relatively good news in view of the economic roller coaster rides caused by legislative impasse. A brief shutdown of federal government agencies, and nail-biting suspense over if and when the FOMC of the Federal Reserve would taper its quantitative easing program.
After a week of light economic data we have a huge week on tap. Major economic reports are scheduled for release including GDP and PCE Prices; however, all eyes will be on the Fed as they release their policy statement on Wednesday.
Mortgage Rates Decline
Last week started of with rates looking like they were going to trend higher; however, we saw a nice reversal lower as the stock market sold off and money flowed out of equities and into fixed income.
Leading Economic Indicators Suggest Economy Strengthening
The Leading Economic Indicators report for December moved up by 0.10 percent, which pushed the index to a reading of 99.4. December’s reading represented the sixth consecutive month that the index gained ground.
Economists associated with the LEI report note that while steady growth is expected during the spring, the economy will likely encounter a few obstacles including rising interest rates and possible political gridlock over raising the national debt ceiling.
With Wednesday’s Fed Policy statement most are expecting additional reduction in the pace of their monthly purchases of Treasuries and MBS. Even after a poor jobs report earlier in the month, the Fed is expected to continue their Taper, the only question is how much. Below is a list of scheduled economic releases.