Tag Archives: Federal Reserve

With the substantial improvement in the outlook for the labor market, as judged by the Committee, since the inception of the QE3 asset purchase program two years ago and the broader economy's underlying strength to support ongoing progress toward maximum employment in a price stability context, the Committee decided to conclude the QE3 program this month.

The residential mortgage loan risk retention rule, known as the "qualified residential mortgage" (QRM) rule, was approved on Wednesday by the U.S. Federal Reserve Board and the Securities and Exchange Commission (SEC). The agencies are the last of the six groups charged with putting together the finalized rule.

The so-called qualified residential mortgage (QRM) rule, which was put up for consideration by FDIC's board of directors Tuesday morning, would require banks to retain at least 5 percent of a loan's risk when packing mortgages to sell to investors in the secondary market. The QRM rule is one of the bigger provisions mandated by the 2010 Dodd-Frank Act, with co-author Barney Frank remarking in the past that risk retention is "the single most important part of the bill."

The economy continued to grow on a "modest to moderate" track over the last month, with consumer spending and job growth fueling improvements in other economic sectors, according to the latest update from the Federal Reserve. With two weeks to go until the Federal Open Market Committee's next policy meeting, Wednesday's report further bolsters the popular prediction that the central bank will vote to end its monthly bond-buying program.

After slowing for the fourth straight month in August, the Federal Reserve's gauge of conditions in the labor market made a slight recovery in September. The Fed's labor market conditions index, which the central bank said it will now release on a monthly basis, added 2.5 points in September after increasing only 2 points in August—its lowest pace of growth in 13 months.

Out of 884 community bankers currently active in the mortgage space, 31 percent expect their institution's residential mortgage holdings at the end of the year will be less than their level last year, according to findings released by the Federal Reserve and the Conference of State Bank Supervisors. Of those who anticipate reductions in the dollar value of their mortgage holdings, most pointed to increased regulation and compliance costs at the reason.

The Bureau of Economic Analysis (BEA) reported Monday that personal consumption expenditures increased $57.5 billion—0.5 percent—month-over-month in August. The increase in spending followed a meager revised increase of less than 0.1 percent for July. Spending was helped by a 0.3 percent pickup in personal income, totaling an increase of $47.3 billion.

Signs increasingly point to economic momentum building in the coming year, according to economists at TD Bank. In a forecast put out Thursday, the bank's economics team calls for economic growth of 3.0 percent in 2015 following average growth of 2.2 percent this year.

Freddie Mac released Thursday the results of its latest Primary Mortgage Market Survey, showing the interest rate on the 30-year fixed-rate mortgage (FRM) jumping more than 10 basis points to an average 4.23 percent (0.5 point), the highest level since the start of May. It was the biggest one-week gain so far this year. "Fixed-rate mortgage rates rose this week following the increase in 10-year Treasury yields being partially fueled by market speculation the Federal Reserve might change its interest rate guidance," said Frank Nothaft, VP and chief economist at Freddie Mac.

In a statement released Wednesday following the end of the Federal Open Market Committee's latest meeting, the Fed announced that starting in October, it will dial back its monthly purchases of agency mortgage-backed securities and Treasury securities to a combined pace of $15 billion per month. Barring any significant setback in the economy in the next month, the committee announced it could end its asset purchases at its October meeting.