Tag Archives: European Union

With the euro zone crisis deepening, members of the Federal Open Market Committee elected to stay the course in November by keeping interest rates historically low and pooling investments from agency debt into agency mortgage-backed securities. Minutes framed discussions around concerns about weakening confidence in the markets as a result of any potential default by euro zone nations, even while the U.S. economy signaled that it would continue climbing out of the financial crisis. Europe helped rattle markets and compel the Fed's action in 2011.

Interest rates for mortgage loans slammed into new lows just before a holiday break, with investors hewing close to the safety of U.S. Treasury debt. Finance Web site Bankrate.com and mortgage company Freddie Mac released their findings in separate weekly surveys. Freddie Mac found the 30-year loan falling to 3.91 percent this week, the lowest this year, as it rocketed past a previous rock-bottom rate of 3.94 percent. Bankrate.com meanwhile found the 30-year fixed-mortgage reaching a second all-time low for the week, as rates for the loan ticked up from 4.19 percent to crest at 4.20 percent.

Amid declining share and revenue across the industry, financial services firm Morgan Stanley announced that it will eliminate about 1,600 jobs, or about 2.6 percent of all employees, multiple news outlets said Friday. The move arrives for the financial services firm amid continued problems for the investment trading industry and debt crises for euro zone countries. Earlier this year Bank of America, Citigroup, and MetLife all followed the same route by announcing job-slashing measures.

Lack of action from the Fed on monetary policy, wrangling in the nation├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós Capitol, and ongoing problems overseas helped push mortgage rates to new record lows this week. Finance Web site Bankrate.com recorded an all-time low for the 30-year fixed-rate mortgage, which slammed into 4.19 percent, down from 4.24 percent. Mortgage giant Freddie Mac countered with rates for the benchmark loan that again fell to 3.94 percent, down from 3.99 percent from the week before.

Acknowledging improvements in the larger economy, the Federal Open Market Committee said Tuesday that it would keep a heel on zero interest rates and continue shepherding funds from mortgage-backed securities into agency mortgage-backed securities. The rate for federal funds remains between zero interest and .25 percent since December, and follows an earlier decision by the Fed to buy up $400 billion in Treasuries to ensure lower borrowing costs.

Mortgage rates remained largely unchanged this week as debt crises in Europe drag on, with finance leaders and heads of state there seemingly unable to broker a solution. Mortgage giant Freddie Mac and finance Web site Bankrate.com each released separate surveys chronicling lurches in interest rates for loans. Bankrate.com also fielded record lows for jumbo 30-year fixed-rate mortgages, with rates for the loan falling to 4.68 percent for the first time in the history of the survey.

The chief economist with Fannie Mae said Tuesday that Europe is "clearly" in recession and forecasted that the United States will endure market corrections for the next five years as housing largely stays in the doldrums. Fannie Mae economist Doug Duncan spoke at the 2011 MPact Mortgage Banking Conference and Expo, which former Secretary of State Condoleezza Rice headlined Monday evening. Rice discussed problems with the euro zone during her keynote address. Duncan predicted that annual growth will hedge toward 1.5 percent over the next year.

In good economic news, payrolls picked up 120,000 jobs in Nov., helping shrink employment to 8.6 percent ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô the lowest in more than two years, according to The Labor Department.

Mortgage rates largely stayed the same this week as trouble in the euro zone threatened to upend global financial markets, encouraging investors to stay near the safe haven of U.S. Treasury debt. Mortgage giant Freddie Mac and finance Web site Bankrate.com released separate weekly surveys that found rates hovering at or above figures seen for several weeks in a row. The GSE noted averages for the 30-year fixed-rate mortgage reaching 4 percent ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô the fifth consecutive week for lows for the benchmark loan.

A bold move to shore up global financial liquidity by the Federal Reserve and central banks from five other countries created a surge in confidence for investors Wednesday, inspiring a pickup in stocks and shares for the nation├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós four biggest U.S. lenders. The Dow Jones Industrial Average jumped nearly 500 points to crest at 12,045.68 by end of day in response, with shares climbing for Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo. Central banks agreed to lower prices for U.S. dollar liquidity swaps by 50 basis points.