Shelter Six:  New Fed Chairman Paints Rosy Picture for Economy

March 5, 2018 by · Leave a Comment 

1. New Federal Reserve Chairman, Jerome Powell, gave his first testimony to Congress last week and painted a rosier picture for the economy than expected.

2. Powell’s forecasts for higher inflation and wage growth as well as comments that the economy had “strengthened since December” caused mortgage rates to rise.

3. Investors now expect another .25% bump to short-term rates at the next Fed meeting on March 21.

4. Evidence of a strengthening economy, the ISM National Manufacturing Index climbed to the highest level since 2004 and Weekly Jobless Claims fell to the lowest level since 1969.

5. According to NAR, in the 4th Quarter of 2017 single-family home prices reached an all-time high in 114 of 177 (64%) U.S. metropolitan statistical areas.

6. The national median price was up to $247,800, up 5.3% from one year ago. Since 2011, home prices have risen 48% but, interestingly, incomes only 15%.

Rate Update

Mortgage rates remained flat last week as strong economic data and comments from the new Fed Chair were offset by concerns over new global tariffs on steel and aluminum.

This Week

ISM National Services Index will be released on Monday, Factory Orders on Tuesday, and Employment figures on Friday.