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Will the Fed taper this month?

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Mortgage Professional America | 06 Dec 2013, 09:32 AM Agree 0
With better-than-expected job growth and new home sales, could the Federal Reserve be about to wind back its $85bn-per-month bond-buying program?
  • George | | 06 Dec 2013, 09:52 AM Agree 0
    How much of this job growth is seasonal, holiday temporary employment? Will it be sustained after the new year? What do the jobs pay? Are they minimum wage service jobs? Give us some more details about the substance of these numbers, please!
  • Luis | | 06 Dec 2013, 10:03 AM Agree 0
    Exactly my thoughts George.
  • Mendota | | 06 Dec 2013, 10:05 AM Agree 0
    What is frustrating about this is both Bernanke and Yellen have pledged their commitment to continued QE. In fact, Yellen has stated that not only will she keep the status quo with the 85 billion, but there is a case to be made for more. During testimony, she flat out said these improvements in numbers are on the surface and the economy is in a fragile state. She said even with QE in place we are struggling to make headway. So reducing QE will only make the recovery that much more difficult and may even push us back into recession.

    She said all of this just days ago. How on Earth can everyone ignore this and talk about tapering when the top dog herself has said no tapering is coming due to the above reasons? In fact, the previous MPA article you guys emailed me an hour ago even highlighted Yellen's commitment to continuing QE and leaving the 85 billion in place.

    Please help me understand...
  • Jim | | 06 Dec 2013, 10:06 AM Agree 0
    One month doesn't make a huge difference. The economy is still struggling, need to see some growth continue for at least another quarter before major decisions are made.
  • Ryan | | 06 Dec 2013, 10:16 AM Agree 0
    If someone has not refinanced by now, what the heck are they waiting for? We will NEVER see 2.5% again for 15 year products nor will we see 3.25% on 30's again. Do it now or don't whine later when you've missed the bus. However, much like the taper rumors in Sept. strangled the refi boom, a taper in QE this January will likely strangle and prevent the slow beginnings of a recovery in the purchase market as rates in the 5's and 6's would put "borderline" income and credit families out of the running for modestly priced homes. With home values still quite lower than pre-2008 meltdown home prices, I don't know too many people interested in selling their $250K+ homes for a substantial loss. So strangling the purchase recovery in the lower and middle class Real Estate sector (those moving for new work, school, or expanding family size) will be a great reason for mortgage companies nationwide to begin handing out pink slips and "right-sizing" like many of the refi rate-shops already have at the demise of the 3.5% rate and term refi. Gain a few jobs at McDonalds and Walmart, lose a few finance careers at Chase and Bank of America. Great trade off!

    Also, if the Fed is going to taper, why on Earth did the administration extend the HARP program? Refinance your 5% mortgage into a 5% mortgage! Woooo! Pointless.
  • Curtis Jackson | | 06 Dec 2013, 10:20 AM Agree 0
    Because the media and press needs to stir the pot. Same way rates took a flying jump over the Summer. There was no easing but because it became such a headline and put the fear into everyone it caused rates to jump even though there was no action taken the fed. Wag the dog. MPA is a little guilty of that themselves I think.
  • Lee in CA | | 06 Dec 2013, 01:03 PM Agree 0
    This article is primarily based on an article by Bill Gross. Unless Mr. Gross is getting "insider information" then this is strickly a reflection of his opinion. So the question would be is Yellen telling the truth or is Mr. Gross's assumption about the Fed's desire to end QE soon simply wrong. This has been a hard issue to predict simply because it is a complex issue for the Fed to decide. They are fully aware of the impact of their past indications of ending QE so they will not jump into that unless they are concerned that the economy might accelerate too quickly. Additionally, there will be back door political pressure to avoid any move that would reflect badly on the current administration. But as with all things concerning the markets, "perception" is reality... so if the traders/investors believe that the Fed is going to reduce QE, then mortgages will get hammered anyway.
  • LM | | 06 Dec 2013, 01:21 PM Agree 0
    All of it is pure speculative talk .. Bill Gross is a bond trader .. his whole means to make money is dependent on a volatile market.. wall street wants a spokesman to say what they need to create the volatility .. they have been trying to push the 10yr yield over 3 since the beginning of summer ... as for the employment data .. just wait unitil January's report when the revise december down ... they will spew more nonsense about January. With the CFPB foaming at the mouth to implement QM come first of January and they raise rates it will most definitely kill the housing market ... Pure propaganda and lies
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