Reproduced courtesy of Glen Braley
I agree with this, the Fed will not increase rates , if it does, it won’t be until the end of the summer.
Just my take,
Have a great week
Economic Commentary This Week
Markets to React to Candidates?
Yes, today we are talking about politicians. And we don’t mean “off their rocker” — just in case you are wondering. What we mean is that they are off and running in a Presidential race. The primaries are in the home stretch and there certainly has been a lot of noise. But as the candidates are finalized, the noise will get even louder. Or, should we say, the rhetoric.
Why is the Presidential race important for the markets? The markets obsess over everything. And if a Presidential candidate says something that upsets or is joyful to the markets, the markets will react as if they are already President, even though they are not. Basically, this will be just one more variable factor the markets will have to contend with for most of the year. Along with jobs (next week), the Federal Reserve Board’s interest rate decision (this week), oil prices, China and about one hundred other factors.
Speaking of the Federal Reserve Board, they announce their decision tomorrow. Most are expecting the Fed not to raise rates at this meeting. Even though the jobs machine has been humming, inflation is nowhere to be seen and most economic reports here and overseas have been less than overwhelming. If they don’t raise rates, speculation will be humming when we get to their next meeting, which is in the middle of June. Just in time for the Presidential conventions!
The Monday Market Update
Rates continued to be stable in the past week, hovering near their lowest levels in almost three years. Freddie Mac announced that, for the week ending April 21, 30-year fixed rates rose one tick to 3.59% from 3.58% the week before. The average for 15-year loans was slightly lower at 2.85%. The average for five-year adjustables decreased to 2.81%.
A year ago, 30-year fixed rates were at 3.65%, close to today’s levels. Attributed to Sean Becketti, chief economist, Freddie Mac — “Volatility in financial markets subsided over the past week, allowing Treasury yields to stabilize. As a result, the 30-year fixed rate was mostly flat, up only 1 basis point to 3.59 percent. The release of March’s existing-home sales report, which shows monthly growth at 5.1 percent, suggests homebuyers are taking advantage of low rates as the spring homebuying season gets underway.”
Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes. http://ow.ly/i/iMVpK
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