Janet Yellen & The Polar Vortex…

  • January 7, 2014

image010Today’s market action has been favorable to bonds, and more importantly to you, the faithful reader of this update, mortgage interest rates. Last night we had the Senate confirmation of Janet Yellen as the next chairman of the Federal Reserve. This is seen as favorable because of her more accommodative monetary policy. Today we had a couple of Federal Reserve presidents speak about how the slowdown of mortgage-backed securities should occur gradually as the economy recovers. With the Federal Reserve still staying in the game to purchase mortgage bonds, this means higher demand, and better pricing can be pushed through to the consumer of mortgages. Topping the economic data and reports released today:

  • The United States trade deficit decreased in November to $34.3 Billion, which was less than the forecasted $39.9 Billion. Typically, this is the good type of news that would lead to investors moving away from bonds, but today was all about the Federal Reserve.
  • Investors seem to have a very watchful eye on Friday for this month’s release of the Jobs Report. The first Friday of every month is typically one of the biggest to watch and is one of the key factors that will move the market, either positively or negatively.
  • Side-topic: it’s cold in Detroit. Really, really cold. Something about a “Polar Vortex”. Hopefully we thaw out a little bit tomorrow and break out of this -30 to -40 degree wind chill.

By Jeremy VanBuskirk, Quicken Loans Capital Markets Analyst

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