If your wallet seems a little lighter these days it’s not surprising. The latest Federal Reserve Board’s Survey of Consumer Finances, conducted every three years, shows that a typical household had a net worth of $77,300 in 2010, down from $126,400 in 2007.
If we didn’t make it clear enough last week, June’s employment report cemented the fact that consistent economic expansion is still a long way off.
Federal Reserve Chairman Ben Bernanke confirmed last week that while the Fed would continue to keep a close eye on the markets, their plans for ending their extraordinary supports from the market would continue as planned, despite current economic conditions.
Overall, mortgage rates dipped again last week as the future direction of inflation and our economic recovery remain unclear. Last Wednesday, the fed concluded a two-day meeting in which Federal Reserve Chairman Ben Bernanke held an unprecedented press conference immediately following the meeting.
As we anticipated, the chairman revealed little new information about how present and future conditions will influence the mortgage market. Read the rest of this entry »
Economically speaking, things aren’t feeling all that different now from when we were mired in the recession. Last week’s disappointing GDP report of 1.6% (2nd quarter 2010) was the exact same reading we saw one year ago.
Federal Reserve Chairman Ben Bernanke addressed the country’s disappointing economic growth at the annual Economic Symposium in Jackson Hole, Wyoming. The chairman expressed both optimism for the coming year and that the Fed still has tools it can employ to ward off deflation or even a double-dip recession.
Mortgage rates are on a roll. Rates fell last week to their lowest levels seen all year. According to the latest issue of HSH’s Market Trends Newsletter, “Mortgage Rates Downshift, Match Year’s Low,” the conforming 30-year fixed rate dipped below the 5% mark.
“Although one might have thought that everyone knew that a sluggish economic recovery is on tap, a reiteration of this by Federal Reserve Chairman Ben Bernanke [last] Monday seemed to push some investors out of equities and back into bonds, driving yields and mortgage rates downward.”
Last week when Federal Reserve Chief Ben Bernanke said that the recession is “very likely over,” it should have been just one more indication that mortgage rates will rise. As most of you know these aren’t typical times, and thanks to the Fed’s unprecedented actions over the past year, the latest issue of HSH’s Market Trends Newsletter — “‘Recession Over’ and Mortgage Rates” — predicts that rates will continue to behave.
“With economic news sporting a warmer glow for the past couple of months, Federal Reserve Chairman Ben Bernanke boldly claimed that the ‘recession is very likely over.’ It’s not unreasonable to assume that many people would respond with the query ‘So when does the recovery start’”
Our prediction for the future of mortgage rates as well as our interpretation of the minutes from the Federal Open Market Committee’s (FOMC) last meeting were confirmed yesterday in a speech delivered by an FOMC member.
Federal Reserve Bank of Atlanta President Dennis Lockhart, also a voting member of the FOMC, said “Certainly we have low interest rates today” and “I would expect that to continue for some time.”
Today was former Treasury Secretary Henry Paulson’s turn to testify in front of a Congressional committee regarding the Bank of America (BofA), Merrill Lynch merger. Previous testimony from BofA chief Ken Lewis claimed that his bank was strong armed by Federal regulators into accepting the merger that he had resisted. Today, Paulson had this to say:
“I further explained to [Lewis] that, under such circumstances, the Federal Reserve could exercise its authority to remove management and the board of Bank of America.”
UPDATE1: Since Congress is looking for someone to blame, who’s going to be the fall guy — will it be Bernanke, Paulson, or Lewis? Former Treasury Secretary Henry Paulson is already out of office, so he makes a good candidate. BofA chief Ken Lewis is the head of an already shaky institution, and his head has been rumored to be on the chopping block for some time now. Then there’s Fed chief Ben Bernanke — his term as Federal Reserve Chairman ends at the ends of January.
While a case could certainly be made for any of the three, Megan McArdle of the Atlantic says that, “firing Bernanke lets Obama portray all of the failures of this year as Bush errors in policy or appointment.” But would that be the smartest move? Read the rest of this entry »
The Federal Reserve said this week that the central bank may consider holding regular press conferences to inform the American people of their latest discussions and possible strategies to combat the ongoing crisis:
“I think it is important for the public to understand what is going on and to know that the government is trying to solve the problem,” Mr. Bernanke said in an interview. “They should know we have a plan and a strategy.”
HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.
