Estimates of major market indicators that influence mortgage rates are provided by Dan Green of The Mortgage Reports. Some highlights of the prior week include:
When Fed Chairman Ben Bernanke took center stage Wednesday at the Economic Club of Washington, his prepared remarks revealed that (1) the economy is cooling off at a predictable pace, and (2) a housing cool-off will remove about 1% from the GDP in 2007. But, not so fast. Just to keep everyone honest, Fed Governor Kohn announced that the high level of optimism in markets right now may be misplaced and that inflation is still on the Fed Radar. Philadelphia Fed President Plosser did the same, warning of inflationary pressures in the economy. The net effect was that mortgage rates dropped about 1/8%, but not as much as they could have in response to Bernanke’s remarks. It’s still possible that the Fed will be taken by surprise if mortgage rates stay low, by the way.
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