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The Week Ahead: Analyzing the Fed

Amid claims that the Federal Reserve’s rate hikes have contributed to slower growth, the Senate Committee on Banking, Housing and Urban Affairs is set to hold its “Semiannual Testimony on the Federal Reserve's Supervision and Regulation of the Financial System” on Wednesday. Many believe the rate hikes has contributed to contributed to recent drops in the stock market, a corresponding rise in bond yields, and a hike in mortgage rates.

"The latest rate move is related to inflation but also the deficit, said Tendayi Kapfidze, Chief Economist at LendingTree. "The tax cut and fiscal stimulus are increasing both inflation and the deficit, pushing rates higher."

But as the economy improves and shows signs of continued growth, the housing market still hasn’t seen any real signs of relief. As recently discussed at length in our sister publication MReport as well as here, mortgage rates are rising and home prices are up over 6 percent year over year. It remains a question how long such dynamic tensions can remain in the industry with demand high but availability so restricted by cost and scarcity.

Rachel Evans, a business journalist with Bloomberg, explores the possible threats posed by passive investment, indicating in a recent article that if trouble lurks in the markets it is likely to first rear its head in real estate index funds. Her piece explores whether or not real estate index funds have reached a point where market saturation has led to inflated shares that could expose the next financial bubble.

Here’s what else is happening in the week ahead:

  • CoreLogic Loan Performance Insights Report, Tuesday, 9 a.m. EST
  • PR 18 Summit, Wednesday, 8 a.m. EST
  • MBA Mortgage Applications, Wednesday 7 a.m. EST
  • Freddie Mac Primary Mortgage Market Survey, Thursday, 8 a.m. EST

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.
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