“Looking ahead, my colleagues and I see a sustained expansion of economic activity, a strong labor market, and inflation near our symmetric 2% objective as most likely.”
– Fed Chairman Jerome Powell, November 13, 2019
This quote from our Fed Chair on Capitol Hill this past week was the definition of a “Goldilocks Economy” and reaffirmed the markets that there is no recession in sight!
Thanks to this strong economic backdrop, Mr. Powell also said it’s highly unlikely the Fed will cut rates again in December. Remember, Fed rate cuts don’t affect home loan rates, so don’t expect a sharp uptick in mortgage rates. Why?
As the Fed’s quote states, inflation remains low and near the Fed’s target. If inflation moves higher, home loan rates move higher. The opposite is also true.
Bottom line: home loan rates improved from the worst levels of the week and head into mid-November still hovering near three-year lows. What an opportunity when coupled with the Goldilocks backdrop.
Forecast for the Week
The upcoming week’s economic calendar will highlight the housing sector which has been gaining momentum in this “Goldilocks Economy” due in part to a strong labor market, rising wages, and historically low home loan rates.
With earnings season winding down, investors will continue to be trapped in the trade headlines from the U.S. and China as a “phase one” signing is expected to happen in the coming weeks.
Reports to watch:
- From the housing sector, Housing Starts and Building Permits will be released on Tuesday, followed by Existing Home Sales on Thursday.
- The Philadelphia Fed’s Manufacturing Index will be delivered on Thursday and will garner some attention.
- On Friday, Consumer Sentiment will be released.
If you or someone you know has any questions about home loan rates, please give me a call. I’d be happy to help.