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Mortgage Prices Continue to Homecoming to Record Lows

October 10, 2012

Mortgage loan rates have returned to the all-time record lows previously reached in mid-July.  The big question, unfortunately, is where do they go from right here? The response more than the upcoming 2 days is likely ”nowhere”, since the markets wait for the speech from You National Reserve Chairman Ben Bernanke planned for Friday.

So far this morning just one financial report happens to be released-and it is a backward hunting measuring.  Preliminary GDP for the second quarter of 2012 ended up being reported at just 1.7%, which is .2% higher than the Advance GDP report for similar period reported last thirty days.  When this stronger development is a good within a good sense, it continue to is considered anemic development at just best.

So the main question becomes: Precisely what will the Provided do about some sort of economy that continues to grow-but does so at just a pace that fails to resolve the issue of too few work being created?  Aided by the “dual mandate” given to Congress to attain both monetary stability as well as the highest possible employment, it appears likely that the Given definitely will find cause to offer more stimulus if the couple believe it might result in job production.

The secondary question: When will the Fed operate to offer excessive stimulus?  This is certainly, however, difficult by the fact that the You Presidential election is a mere 70 days away.  As a non-political body, the Provided and additionally Chairman Bernanke do every one of the they may be able to stay from political discussions and additionally strive to prevent actions that could very well appear to favor one political celebration or even the other.  In this situation providing more stimulus before the election could very well appear to favor the active Administration.  Unfortunately, I feel sure that Chairman Bernanke would operate if he thought the economy was actually weakening actually further.

Consequently, the Beige Book report of the economic activity in all thirteen of the Federal Reserve bank regions revealed at just 2 PM ET this afternoon turns into a really important guide to just what Chairman will say in his speech Friday.  If economic growth is consistent or accelerating across the country then the Chairman definitely will discuss his willingness to act -after the election.  If, in the other hand, there is not a development seen or even worse a deterioration of financial conditions, then I expect he will lay away the case for stimulus to begin in September.

 

For more information visit our website-The Serrao Team

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