Good news from the Federal Reserve

The Federal Reserve took center stage last week following through with its commitment to become more transparent. The Fed has revealed that it intends to keep rates "extraordinarily low" for a longer period than thought, potentially through 2014. Additionally, the Fed has now officially stated that it will use an inflation target to help control monetary policy. Following the Fed’s announcement, Fed Chair Bernanke revealed that the Fed is considering a QE3, potentially later this year. Mortgage rates had been on the rise, until this statement, which many interpreted as the Fed showing signs that it has significant concerns about the overall state of the economic recovery.

This week is jam packed with economic news and data for markets to digest. We have both ISM Indices due, Consumer Confidence, and the monthly employment data. Should any of these reports reveal signs of economic slowing, mortgage rates are likely to move back toward record lows.  However, a week of positive economic data could nudge rates just slightly higher at the week’s end.

Source: Market Watch Report from Axiom Financial

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