Heads Up, Yellen Says Hike Coming Soon
On Thursday night, Fed Chair Yellen gave her first speech since the Fed meeting on September 17. She clarified many of the issues which had created uncertainty for investors. She said that she expects that a federal funds rate hike will be appropriate before the end of the year. She also reassured investors that the U.S. economy is strong enough to handle a rate hike. She noted that the impact of global economic weakness on the U.S. was not likely to be significant enough to have much influence on future Fed policy. After her speech, global stock markets rallied and mortgage rates gave back much of the previous week’s gains.
Meanwhile, the housing market keeps chugging along as more positive data was released last week. August new home sales increased 6% from July to the highest level in over seven years. New home sales were 22% higher than a year ago. While August existing home sales decreased a little from July, they remained near multi-year highs.
Week Ahead
Factors: The important monthly Employment report will be released on Friday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month.
Volatility: High
Trend: Slightly Higher
Check back weekly for the mortgage industry update.