Tag Archives: Federal Reserve

First-time claims for unemployment insurance for the week ending September 7 plunged 31,000 to 292,000, the lowest level since March 2006, the Labor Department reported Thursday. Economists expected the number of claims to edge up to 330,000 from the 323,000 originally reported for the week ending August 31. The number of filings for that week was unchanged.

Mortgage interest rates headed higher this week, nearly reaching year-to-date highs as markets waited for the Friday morning release of the August Employment Situation Report. Freddie Mac's weekly survey put the 30-year fixed-rate mortgage at an average 4.57 percent for the week ending September 5, up from 4.51 percent last week. Shorter term fixed rates and adjustable-rate mortgages all climbed higher as well. Freddie Mac's chief economist attributed the rise in rates to ""signs of a stronger economic recovery.""

Continuing to shrug off sequester cutbacks, but feeling the effects of adverse weather, the nation's economy ""continued to expand at a modest to moderate pace"" from early July through late August, the Federal Reserve reported Wednesday in its Beige Book assessment. Echoing--or perhaps anticipating--governors' concerns at the upcoming policy meeting, the Beige Book said ""hiring held steady or increased modestly"" while ""upward price pressures remained subdued, and prices increased slightly.""

Consumers kept their cash--and credit cards--in their wallets in July as personal spending rose just 0.1 percent, while income increased 0.2 percent, the Bureau of Economic Analysis reported Friday. Economists had expected income to grow 0.2 percent but thought spending would increase 0.3 percent.

Freddie Mac's weekly updated Primary Mortgage Market Survey shows the 30-year fixed-rate mortgage (FRM) averaging 4.51 percent (0.7 point) for the week ending August 29, down from 4.58 percent the prior week. A year ago at this time, the 30-year FRM averaged 3.59 percent. The 15-year FRM this week averaged 3.54 percent (0.7 point), down from 3.60 percent previously.

First-time claims for unemployment insurance for the week ending August 24 dipped 6,000 to 331,000, the Labor Department reported Thursday. Economists expected the number of claims to fall to 330,000 from the 336,000 originally reported for the week ended August 17. The number of filings for that week was bumped up to 337,000.

Six federal agencies jointly released their proposed QRM rule that would require lenders to retain risk when selling mortgage-backed securities (MBS). The new proposal was created in consideration of the industry's response to the original proposal issued in 2011. That proposal required lenders to keep a stake in the loans they sold in which borrowers were spending more than 36 percent of their income on payments and in loans with down payments of less than 20 percent. Under the new proposal, the 36 percent income threshold has been raised to 43 percent, and the revised rule also eliminates the down payment requirement.

Fannie Mae's Economic & Strategic Research group expects economic growth to gain momentum in the later half of the year following a slow start. Looking ahead, the group expects GDP growth will average 2.0 percent for the year, accelerating to 2.6 percent in 2014 as fiscal drags peel away and the housing recovery continues. According to Fannie Mae chief economist Doug Duncan, ""[t]he biggest risk to this forecast is the expected reduction in the Federal Reserve's asset purchases.""

Existing-home sales soared 6.5 percent in July to an annual sales rate of 5.39 million--the highest level since November 2009--as the price of a single-family home slipped 0.2 percent, the National Association of Realtors (NAR) reported Wednesday. Despite the month-over-month decline, the median price of an existing-home was $213,500, 13.7 percent ahead of the price in July 2012. It was the strongest yearly price gain since October 2005.

With Ben Bernanke set to leave his post as Federal Reserve chairman next January, we could be set for a history-making appointment. Lawrence Summers' appointment would appear to be justified looking solely at his resume, but it was at Harvard he may have shown his true colors. Janet Yellen is considered a ""dove"" on the Federal Open Market Committee--more concerned with unemployment than inflation and thus less likely to press for higher interest rates.