FOMC Minutes Suggest QE Tapering by Year-End
Ben Bernanke, Fed Chairman, blew up the bond and mortgage markets a month ago with his comments that the Fed is preparing to begin reducing the monthly purchases of treasuries and mortgage-backed securities. Rates spiked, and left folks shopping for mortgages, shaking their heads. The minutes for June’s meeting of the Federal Open Market Committee (FOMC) suggest that committee members are mostly in agreement that the current quantitative easing program (QE) should begin winding down by year-end, but the committee minutes are very clear about the committee’s intention to monitor inflation and ongoing economic and financial developments before taking action to reduce the current rate of QE. Continue reading
Over the past 7 trading days, Mortgage rates were wounded with 2 of the largest one-day spikes in over 2 years. Rates rose last week with average rates a 30-year fixed rate mortgage rising from last week’s 3.35 percent to 3.42 percent with buyers paying all closing costs and 0.7 percent in discount points.
Mortgage rates fell again last week and are again near record lows.
Mortgage rates worsened last week in response to more indications that the U.S. economy and global economic trends are improving. Global economic data was stronger than expected; which generally boosts investor confidence and leads to higher mortgage rates in Sacramento and across the country.