A rise in the key interest rate could come “relatively soon,” Federal Reserve Chair Janet Yellen reiterated on Thursday, heightening the probability the Fed will forge ahead with a hike in December, despite initialdoubtsin the wake of Donald Trump’s presidential victory. Mortgage rates, which generally follow the key rate, shot up this week, with the 30-year fixed rate mortgage topping out at an average 3.94 percent from 3.57 percent the week prior.
“This week, the verdict is in—over the last two weeks, the 30-year mortgage rate jumped 40 basis points to 3.94 percent, almost identical to the 39 basis point increase in the 10-year Treasury yield,” says Sean Becketti, Freddie Mac’s chief economist. “If rates stick at these levels, expect a final burst of home sales and refinances as ‘fence sitters’ try to beat further increases, then a marked slowdown in housing activity.”
Yellen’s position—which comes as the dust settles after one of the most contentious elections in history—reinforces the sentiments of Federal Reserve Bank of Philadelphia President Patrick Harker and Federal Reserve Bank of St. Louis President James Bullard, who both voiced support for future hikes this week.
Author:Sheryl Volk Phone: 561-389-8670 Dated: December 6th 2016 Views: 262 About Sheryl: ...
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