Eric Rosengren, president and CEO of the Federal Reserve Bank in Boston, said in a speech in Hartford, Connecticut that predictions concerning the economy have been much weaker than expected in the first half of this year. He also noted that policymakers should wait until the economy picks up before raising short-term interest rates.
Rosengren observed real GDP growth in the two years preceding the tightening cycles and it was above 3 percent. Today, that rate is at 2.3 percent, and will possibly be less than 2 percent in the first half of this year. Making note of the Federal Reserve’s dual mandate from Congress that is focused on stable prices and maximum sustainable employment, Rosengren said that measures of inflation are not yet showing much evidence of returning to the 2 percent level that the Fed is targeting.
A working paper titled What’s Behind the Non-Bank Mortgage Boom, released by Harvard's Kennedy School, found that non-bank lending institutions have increased their market share of agency purchase mortgage originations from 27 percent in mid-2012 to 48 percent in late 2014. Last year, in terms of dollar volume, non-banks accounted for over 40 percent of total originations, compared to 12 percent in 2010. Of the 40 largest servicers, 16 were non-banks, making up 20 point 5 percent of the market.