Friday, November 22, 2013 / by David White
by Caliber Home Loans, Inc or special contributors on 11/22/13
Weekly Update | November 22, 2013
Mortgage rates worsened this week after the FOMC (Federal Open Markets Committee) released the minutes from their October meeting, stating that Fed-policy tapering may occur in the "upcoming months" while consumer sentiment remains "unusually low". The minutes further stated that while there are several significant risks within the U.S. economy with little economic change since September, economic growth is expected to increase. The FOMC mentioned that while the housing recovery has slowed, fiscal policy is restraining economic growth, as further improvement in the labor markets and a moderately expanding economy may warrant tapering soon.
While there were no heavy economic releases until mid-week, mortgage rates saw moderate volatility alongside of several Fed speakers. Philadelphia Fed President, Charles Plosser, stated that the Fed should end their bond buying program once a fixed limit has been reached, as stronger economic conditions are a weak justification for ongoing stimulus. Richmond Fed President, Jeffrey Lacker, stated how monetary stimulus will only have limited and transitory effects, as current economic growth trends appear to be driven mainly by growth of population and productivity. While Chicago Fed President, Charles Evans, announced that the Fed is in no hurry to taper, current Fed Chair, Ben Bernanke, reiterated how the Fed will adjust their current monetary policy based on economic recovery, with a possible taper for next year.
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