JohnsBlog (articles, news, thoughts, advice)

The Fed meeting today revealed not much of a surprise in that their are hopes for a recovering economy, and interest rates will likely remain low for a while.

As treasury bonds will no longer be purchased by the Fed after October, it will be interesting to see how sales go on the open markets.  Will investor appetite be able to absorb the enormous supply created by low interest rates, or will appetite be dry, forcing interest rates up?  October could be an interesting month and crossroads for the economic recovery, and may be the revealing month to see if the economy is ready to stand on its own 2 feet, or if we are truly staring down the barrel of a double dip recession in which the stock market will mirror the 1929 trend which led downwards.

In the meantime, unemployment revisions I believe will be key figures, as vastly understated figures could shake the markets.  This will be an interesting end to the year, and that may be the one certainty in it all.

For now, rates should remain near their current levels between 5 and 5.5 for traditional loans.  Should things change, you'll surely find an update here!

Stocks are seeing sizeable losses so far this week (aside from an abnormal boost today for no apparent reason) as economic news comes in more favorable towards long term investments such as bonds.  Mortgages rates have responded accordingly with some pretty nice gains.  Now's a great time to get into a new loan or lock in a rate on a home purchase.

Looks like inflation will not be a concern for some time, as we're currently seeing a pretty steady deflationary trend.  Consumer spending is down, savings are up, and the economy is showing that those overly optimistic reports we've seen over the past few weeks may have been premature at best.

The bad news is that with these reports of an economic turnaround, stock markets jumped, and bond markets tanked, so we see interest rates shoot up for no "real" reason.  It's frustrating to follow the market and have a good knowledge of it, only to see things go downhill for no reason.

More to come soon as volatility is the name of the game, should be an interesting week for home mortgage rates.

Call in with any market questions or needs!

For the first time in a long time, the S&P hit over 1000, and the DOW is up to almost 3000 points above its low.  Oil is at $70+/barrel for the first time since July 1....is the market back?

There are still a lot of issues at hand, however it appears the market is hitting a high point, which I'm not sure will last for too long a time.  Some economists have predicted a double dip recession, which seems very plausible, especially when taking an increasing unemployment rate into account and a still very fragile housing market.

Enjoy for now, I think we'll see a trend reversal pretty soon, as unemployment will hit consumer confidence and spending before long, and that could cause a ripple effect across the economy.  The fragile housing market could still cause some problems for the economy as well, with the Alt-A loans that are out there, which I've covered before.

Be sure to call for all your market or mortgage questions or queries.