Fed Speaks, Rates Increase

Two weeks ago, mortgage interest rates had reached a five-week low. Last week, in anticipation of what the Federal Reserve Board would have to say, many mortgage borrowers were waiting to lock-in the interest rate on their impending loans. Once the Fed spoke, by the end of last week, interest rates had spiked about a quarter of a point. 

Today, Federal Reserve Chairman Ben Bernanke is speaking again, which has everybody waiting in anticipation to see what will happen. While interest rates do not directly change based on what Bernanke says, experts always analyze his speeches for indications of what the future holds.

Bernanke speaking on top of several announcements this week may clear the path for a recovering economy or muddy the waters. Earnings reports for over 130 of the companies included in the S&P 500 Index and the housing start numbers for the first half of October are making a debut this week. Unemployment numbers and existing home sales figures are coming later this week. All of these number announcements may paint a clear picture of what the future holds for the economy—be it good or not so good.

While the move in interest rates may have started with the Fed speaking, additional movement—up or down—may occur when the rest of the financial and housing markets speak this week.

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

Steve SchraderBachar is a local mortgage planning expert who resides in Iowa and provides service to the clients of his mortgage planning practice across the Midwest.  You can reach Steve at 1-515-289-4381 or 515-360-5197.