Market Update – Bernanke "Unusually Uncertain" on Economic Outlook

Yesterday, treasuries and mortgages rallied as the Fed remains prepared to act as needed to aid economic growth. Bernanke used the term, “unusually uncertain” to describe the economic outlook. Traditionally, the FOMC would cut rates but with the Fed Funds rate at or near zero, he outlined how they could lower the amount interest paid on bank reserves, pushing money back into the economy via banks. Mortgages are selling off this morning on better than expected home sales data (-9.9% was expected, -5.1% was actual).

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Market Update – Bernanke to Testify to Senate Banking Committee

The market is relatively flat this morning ahead of Bernanke’s testimony to the Senate Banking Committee today. It is expected that Bernanke will be reiterating that rates will remain low for a while. In terms of economic releases, MBA’s mortgage application index came in higher at 7.6%, being that record low rates have boosted refinancing.

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Market Update – Poor Outlook in Home Building Market

Treasuries are relatively unchanged this morning arfter Friday’s rally following the low reading on the consumer confidence report. Today, we have the NAHB housing market index at 10 a.m. EST which measures the general state of the single family home building market. It is expected to drop to 16. A reading can come in between 0 to 100, and below 50 indicates a poor builder outlook.

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Market Update – Concerns Economic Recovery Slowing

Yesterday’s release of the FOMC minutes showed a cautious Fed with a downward revision to 2010 growth. Most investors had already speculated that the Fed would remain accomodative over concerns that the economic recovery is slowing. Initial claims continue to show no real signls if improvement. The continuing claims fell, but it is widely believed that the decline in the number of people receiving benefits is due more to people running out of benefits than a surge in hiring.

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