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Market Monitor November 22, 2013


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Review of the next FOMC Janet Yellin.

Published in: Real Estate
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Market Monitor November 22, 2013

  1. 1. I s su e 14 , Vo lu me 4 5 / N o ve m be r 2 2 , 201 3 An Overview on our Next (?) FOMC Chairwoman The Week Ahead -> The “Keys” Tim McLaughlin - Heavy Dose of Housing Data during a short holiday week As the confirmation of Janet Yellen as the next FOMC Chairperson becomes more of a certainty, the market is beginning to envision what a “Yellen” Fed will look like. What they see is someone who believes wholeheartedly with the current Fed approach to tackling stubbornly low inflation, a jobs market which is gaining traction but still far from where it needs to be with respect to quality job growth, and a housing market that is slowing down from the torrid pace of the past year and a half. This should be good news for mortgage participants in the short run. Why all the Monday Morning Quarterbacking on Mrs. Yellen in the market place? Because once Ben Bernanke leaves office Janet Yellen will most likely become a mortgage participants new BFF…and if there’s one thing the mortgage market needs right now is a powerful BFF. So for now the market breathes a slight sigh of relief knowing that Mrs. Yellen is not about to pull the punch bowl from the party until the data confirms, in her mind, that the economy can weather an exit from QE. Hopefully, you’re now a little bit more knowledgeable should, on the off chance, one of your borrowers ask what a new Fed Chairperson means for interest rates. Last 2.0% -5.6% Pending Home Sales (YoY) - 1.1% 11/25 Dallas Fed Manufacturing - 3.6% 11/26 Housing Starts 921K - Housing Starts (MoM) 3.6% - 11/26 Building Permits 933K - 11/26 Building Permits (MoM) 0.9% - 11/26 S&P/CS 20 City (MoM) 0.90% 0.93% 11/26 S&P/CS 20 City (YoY) 12.97% 12.82% 11/26 S&P/CS HPI - 164.53 11/26 S&P/CS HPI (YoY) - 10.08% 11/26 Housing Price Index (MoM) 0.4% 0.3% 11/26 House Price Purchase Index - 2.10% 11/26 Consumer Confidence 72.1 71.2 11/27 MBA Mortgage Applications - -2.3% 11/27 Initial Jobless Claims 330K 323K 11/27 Continuing Claims - 2876K 11/27 Durable Goods Orders -1.7% 3.8% 11/27 Yellen is not always a dove though and has a history of attacking inflation as aggressively as anyone else, having voted for interest rate hikes over a dozen times in the past. So don’t think we’re getting an inflation pushover. What we are getting is a well-tenured academic who understands the nuisances of economic theory and who Alan Greenspan and Ben Bernanke openly admit using as a resource when they’re stuck on a particularly vexing and troublesome problem. Hopefully we’re getting someone that can continue to guide us through the final stages of the worst economic downturn since the 1930’s. Prediction 11/26 What makes Yellen qualified for this position? While Larry Summers was President Obama’s clear first choice many would argue that Brooklyn born Mrs. Yellen should have been. Yellen graduated from Brown, received her Ph.D. at Yale, taught at Harvard, served as Chair of the Council of Economic Advisors for President Bill Clinton, ran the Federal Reserve Bank of San Francisco, and currently serves as Vice Chairperson of the FOMC under Ben Bernanke. So, yeah, she’s got some skills. Date Economic Release 11/25 Pending Homes Sales (MoM) 11/25 ex Transportation 0.5% -0.2% 61.0 65.9 11/27 Chicago Purchasing Mgrs 11/27 Cap Goods Orders - -1.3% 11/27 BB Consumer Comfort - -34.6 11/27 U of Michigan Confidence 73.0 72.0 11/27 Leading Index 0.0% 0.7% © Copyright 2012 Weichert Co. Morris Plains, NJ, USA. All rights reserved. Any form of reproduction or distribution is strictly prohibited. Company NMLS # 2731. Mortgage Access Corp. d/b/a Weichert Financial Services, Executive Offices, 225 Littleton Road, Morris Plains, NJ 07950. 1-800-829-CASH. Licensed by the NJ Dept of Banking and Insurance. Licensed Mortgage Banker with the State Dept of Banking in NY and CT. Licensed by the Pennsylvania Department of Banking, Mortgage Lender 21042. Licensed Lender in AK, AR, DE, MD, D.C., GA, ME, MN, WI, IA, IN, LA, VT, WV, NC, ID, NE, WY, OK, TN, MI. Licensed by the Virginia State Corporation Commission, License #MC297. Certificate of Authority to transact business in CO. To check the license status of your mortgage loan originator, visit Licensed Lender in SC. Licensed Mortgage Lender in TX. Licensed with the Financial Institutions Division in New Mexico, License # 01297. Licensed by the Department of Corporations under the California Residential Mortgage Lending Act. Licensed Mortgage Broker and Lender Ohio. Licensed Loan Broker and Lender Rhode Island. Licensed Oregon Mortgage Lender License #ML2528. Illinois Residential Mortgage Licensee, License #MB.0006377. Mississippi Licensed Mortgage Company, License #357/2008. Washington Consumer Loan License # CL-2731. Alabama Consumer Credit License #21213. Mortgage Access Corp. arranges loans with third-party providers. Equal Housing Lender.