Economic Update

Weekly Mortgage News

The minutes from the Fed’s last meeting were released last week, and everyone is trying to “read the tea leaves” for clues on when they plan to back off their bond-buying program (QE3.)

Chairman Bernanke reacted quickly to the market volatility in a speech last week saying that “highly accommodative monetary policy for the foreseeable future is what’s needed in the U.S. economy.”

Recap from Last Week
Another reason why the Fed may continue their bond-buying to keep rates low is the anemic labor market. Even though the last jobs report was better-than-expected, we’re still not out of the woods yet. Especially if you look at the 16% unemployment rate among 18-29 year olds!

Bottom Line for Mortgages:
Good housing news and a jump in inflation at the wholesale level are continuing to push mortgage rates higher.

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