All signs point to a rate increase, but many are speculating as to when this rate increase will hit.
Charles Dallara, Partners Group Chairman of Americas, believes that the market’s pricing are indicative of Fed rate increases. During a recent interview with Bloomberg News, he spoke about there being “clear evidence of inflation in the U.S. economy.”
Federal Reserve Chair Janet Yellen did not reveal her entire plan of action before the Senate banking committee, however, many are anticipating what’s to come in the following months. The data that was released last week have boosted economic confidence and have increased the possible actions of a Fed rate.
The Feds have also raised the short-term goal rate in the month of December for the first time in a year. Many economic experts also expect the meeting outline to disclose a discussion between Fed Lawmakers to begin reducing its balance sheet.
During and after the financial crisis, the Fed bought more than $3 trillion in Treasury bonds and mortgage-backed securities, which in turn pushed away long-term interest rates. According to
According to the USA Today, economists expect the National Association of Realtors to report a 1.1 percent rise in sales in January to a seasonally adjusted annual rate of 5.6 million, and they also expect the Commerce Department to report on Friday a 7.3 percent increase in new home sales last month to a seasonally adjusted annual rate of 575,000.
“In December, home sales fell 2.8 percent amid a 3.6-month supply of homes, lowest since 2005,” said Lewis Alexander, an Economist for Nomura. Alexander also noted that pending home sales and mortgage applications have been solid recently, but he expects a rebound in home sales for January.