AgentIndustry News

Housing is ‘wild card’ for Fed

Mortgage market commentary
Published on Feb 19, 2007

Mortgage rates stabilized near 6.25 percent at the close of last week, with the 10-year T-note providing gravity in a range near 4.7 percent. The bond market has done a lot of intra-day bouncing, trying to find a level after a two-month, straight-line run-up in rates, then a downward correction, and then the Federal Reserve Chairman's annual testimony to Congress. Bouncing was a sensible thing to do. Reading Alan Greenspan's prose was a confusing but elegant stroll through the hedge maze in a full-blooming Victorian garden. New Fed Chair Ben Bernanke, however, writes a concrete sidewalk straight across a salt flat. He led with a "... The predominant policy concern is the risk that inflation will fail to ease ... " but I think that line is the result of his painful learning experience last year: the Fed chairman must always indicate that inflation is the primary concern. Later on he was more descriptive, but gave only a dry -- desiccated -- recitation of the Fed-staff forecast: GDP ...