Last week was all about the Federal Reserve and their decision to continue purchasing $85 Billion of Mortgage Backed Securities and Treasury’s every month. Fed Chairman Ben Bernanke in his scheduled statement indicated that economic conditions were not yet adequately improved to withstand any decrease in the federal quantitative easing program.
The Fed also reaffirmed that the target federal funds rate would remain at 0.00 to 0.25 percent until the national unemployment rate reached 6.50 percent and inflation reaches 2.00 percent.
The national unemployment rate was 7.30 percent and the Fed projects that inflation will remain under 2.00 percent through 2015.
In both the FOMC statement and his press conference, Chairman Bernanke repeatedly emphasized that the Fed would take no action to reduce QE until the economy strengthens. No automatic reduction of QE purchases would take place without full consideration of the nation’s economy.
The QE program is intended to keep long-term interest rates low, and the announcement that QE would not be tapered resulted in mortgage rates moving lower by around .25%.
Big Week For Mortgage Rates
This week is packed with economic releases including Consumer Confidence, GDP and the Fed’s favorite gage on inflation PCE. Freddie Mac will release its weekly summary of average mortgage rates and weekly jobless claims will also be released Thursday.
|Date||Time (ET)||Economic Release||Actual||Market Expects||Prior|
|24-Sep||9:00 AM||Case-Shiller 20-city Index||–||11.50%||12.10%|
|24-Sep||9:00 AM||FHFA Housing Price Index||–||NA||0.70%|
|24-Sep||10:00 AM||Consumer Confidence||–||80||81.5|
|25-Sep||7:00 AM||MBA Mortgage Index||–||NA||11.20%|
|25-Sep||8:30 AM||Durable Orders||–||0.40%||-7.40%|
|25-Sep||8:30 AM||Durable Goods -ex transportation||–||0.90%||-0.80%|
|25-Sep||10:00 AM||New Home Sales||–||416K||394K|
|25-Sep||10:30 AM||Crude Inventories||–||NA||-4.368M|
|26-Sep||8:30 AM||Initial Claims||–||325K||309K|
|26-Sep||8:30 AM||Continuing Claims||–||2775K||2787K|
|26-Sep||8:30 AM||GDP – Third Estimate||–||2.50%||2.50%|
|26-Sep||8:30 AM||GDP Deflator – Third Estimate||–||0.80%||0.80%|
|26-Sep||10:00 AM||Pending Home Sales||–||-2.30%||-1.30%|
|26-Sep||10:30 AM||Natural Gas Inventories||–||NA||46 bcf|
|27-Sep||8:30 AM||Personal Income||–||0.40%||0.10%|
|27-Sep||8:30 AM||Personal Spending||–||0.20%||0.10%|
|27-Sep||8:30 AM||PCE Prices – Core||–||0.10%||0.10%|
|27-Sep||9:55 AM||Michigan Sentiment – Final||–||77.3||76.8|