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Mortgage rates ended the week a bit higher and Chair Yellen expects a rate high by the end of the year

September 25th, 2015 1:31 PM by Jonathan White


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Yellen Clarifies Fed Policy


This week, mortgage rates gave back some of the improvement seen following last week's Fed meeting. The reversal was helped along by comments from Fed Chair Yellen. Recent economic data was mixed and had little impact. Mortgage rates ended the week a little higher. 


On Thursday night, Fed Chair Yellen gave her first speech since the Fed meeting on September 17. She clarified many of the issues which had created uncertainty for investors. She said that she expects that a federal funds rate hike will be appropriate before the end of the year. She also reassured investors that the U.S. economy is strong enough to handle a rate hike. She noted that the impact of global economic weakness on the U.S. was not likely to be significant enough to have much influence on future Fed policy. After her speech, global stock markets rallied and mortgage rates moved higher. 


The housing data released over the past week was encouraging. August new home sales increased 6% from July to the highest level in over seven years. New home sales were 22% higher than a year ago. While August existing home sales decreased a little from July, they remained near multi-year highs.



Looking ahead, the important monthly Employment report will be released on Friday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month. Before that, the Core PCE price index, which is the Fed's preferred inflation indicator, and Pending Home Sales will come out on Monday. The ADP Employment Change will come out on Wednesday. The ISM national manufacturing index will be released on Thursday.



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Posted in:Mortgage and tagged: Mortgage Rates
Posted by Jonathan White on September 25th, 2015 1:31 PM


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