Last Week in Review: The Definition of Goldilocks
"Looking ahead, my colleagues and I see a sustained expansion of economic activity, a strong labor market, and inflation near our symmetric 2% objective as most likely." -- Fed Chairman Jerome Powell, 11/13/2019
This quote from our Fed Chair on Capitol Hill this past week was the definition of a "Goldilocks Economy" and reaffirmed the markets that there is no recession in sight!
Thanks to this strong economic backdrop, Mr. Powell also said it's highly unlikely the Fed will cut rates again in December. Remember, Fed rate cuts don't affect home loan rates, so don't expect a sharp uptick in mortgage rates. Why?
As the Fed's quote states, inflation remains low and near the Fed's target. If inflation moves higher, home loan rates move higher. The opposite is also true.
Bottom line: home loan rates improved from the worst levels of the week and head into mid-November still hovering near three-year lows. What an opportunity when coupled with the Goldilocks backdrop.
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