Milwaukee Mortgage Rates jumped last week but have since started slowly reversing. We have been talking about our perception of the Wisconsin Mortgage environment. Here are a list of reasons last week caught us completely off guard. These are quotes from www.marketwatch.com and an associated press article.
The rate on 30-year loan soared from 3.93 percent last week to 4.46 percent this week the biggest one-week jump in 26 years.
â€œA rise in short-term rates is very likely to be a long way offâ€ even as itâ€™s possible that the central bank may slow the pace of its bond-buying program later this year, Federal Reserve Bank of New York President William Dudley said in a press briefing.
The official noted the shift in market rates that followed last weekâ€™s monetary-policy-setting Federal Open Market Committee meeting is seen by observers as signaling rate rises could come â€œmuch earlier than previously thought.
Mr. Dudley, who is at the core of Fed monetary policy decision making, said â€œlet me emphasize that such an expectation would be quite out of sync with both FOMC statements and the expectations of most FOMC participants.â€
Mr. Dudley said if the economy performs as he expects, the Fed believes it can â€œmoderateâ€ the pace of bond buying later this year, saying â€œsubsequent reductions might occur in measured steps through the first half of next year, and an end to purchases around mid-2014.â€ Reiterating what Mr. Bernanke said last week, the policy maker said bond buying could end when the economy achieves around a 7% unemployment rate.
But he noted things could also go the other way. â€œIf labor market conditions and the economyâ€™s growth momentum were to be less favorable than in the FOMCâ€™s outlookâ€“and this is what has happened in recent yearsâ€“I would expect that the asset purchases would continue at a higher pace for longer.â€
A report this week suggested that the economy might not be as strong as some had thought. The government cut its growth estimate for the January-March quarter to an annual rate of just 1.8 percent much lower than the 2.4 percent rate it estimated a month ago.
A key reason for the downgrade was that consumers spent less than previously thought. Less spending has led some economists to predict that growth will stay weak through the summer and fall short of the Fed's more optimistic forecast of 2.3 percent to 2.6 percent growth for all of 2013.
The downgrade for economic growth has cast some doubt on the likelihood that the Fed will reduce its stimulus later this year. Several Fed voting members have stressed in recent days that Bernanke's comments made clear that any pullback in bond purchases would hinge on the economy's performance, not a calendar date.
Those reassurances and solid, if not spectacular, economic data have helped boost stocks in recent days and reverse a jump in long-term interest rates. The yield on the 10-year Treasury note fell Thursday to 2.47 percent, down from its two-year high of 2.66 percent on Monday.
We have been saying the exact same thing for the last three weeks. This
economy is not as strong as analyst would have you believe. Milwaukee Mortgage
rates jumped out of our range of 3.75% to 4.25% last week, but are very close to