The past weeks have seen mortgage rates break previous lows and set new record lows. These rates have been driven down by a slew of negative economic data that has has disappointed expectations. Additionally, the lack of leadership in Congress led to an embarrassing show over the debt ceiling, which played a role in S&P lowering the United States’ credit rating did its fair share of helping rates move down. Finally, weakness and uncertainty in European markets provided the final punch needed to move rates to all time record lows.
A Week Waiting For Ben, What Did He Say?
This week has been one marked by a market holding its breath, waiting for Federal Reserve Chairman, Ben Bernanke to speak this morning.
From Ben’s Speech (view speech here):
Normally, monetary or fiscal policies aimed primarily at promoting a faster pace of economic recovery in the near term would not be expected to significantly affect the longer-term performance of the economy. However, current circumstances may be an exception to that standard view–the exception to which I alluded earlier. Our economy is suffering today from an extraordinarily high level of long-term unemployment, with nearly half of the unemployed having been out of work for more than six months. Under these unusual circumstances, policies that promote a stronger recovery in the near term may serve longer-term objectives as well. In the short term, putting people back to work reduces the hardships inflicted by difficult economic times and helps ensure that our economy is producing at its full potential rather than leaving productive resources fallow. In the longer term, minimizing the duration of unemployment supports a healthy economy by avoiding some of the erosion of skills and loss of attachment to the labor force that is often associated with long-term unemployment.
Ben Also Remarked About the Negative Impact of Congress’s Behavior During Debt Ceiling Debacle:
The negotiations that took place over the summer disrupted financial markets and probably the economy as well, and similar events in the future could, over time, seriously jeopardize the willingness of investors around the world to hold U.S. financial assets or to make direct investments in job-creating U.S. businesses.
Summary of Ben’s Speech
- Economy isn’t deteriorating fast enough to warrant further stimulus. This is seen as being positive by some, if the market were in worse shape yet, further stimulus would be needed.
- Economic growth during the first half of this year was considerably slower than the Federal Open Market Committee had been expecting.
- Progress towards recovery is occurring albeit much slower than expected.
How Does This Affect Me and My Mortgage?
Rates are moving upward and away from record lows, which means now is the time to lock in a low mortgage rate while we are still near record low levels. Rates are expected to move very fast when they do make their push upward, so do not gamble by waiting, lock in savings now.