Interest Rate Roundup

Wednesday, May 21, 2008

Some thoughts now that I'm back online

Good morning -- I'm back online after a couple days of vacation. What, you didn't notice I was gone? Now my feelings are really hurt. Anyway, here are just a few of the things I'm watching and mulling over today, in no particular order ...

* Mortgage activity slumped in the most recent week, according to the Mortgage Bankers Association. Purchase applications were down 6.9%, while refis were down 8.7%. At 352.5, the purchase index is just off its 2008 low (240.1 in the week of 4/25).

* Troubled lender Impac Mortgage Holdings lost a few bucks in 2007 -- specifically, $2.05 billion. The firm's provision for loan losses rose more than 40-fold to $1.39 billion from $34.6 million in 2006. That's going to leave a mark.

* The debate over an FHA-backed housing rescue plan continues. We'll have to see how the full Senate tackles the issue, and how the Senate bill is reconciled with the plan the House has already signed off on.

* The Vice Chairman of the Fed, Donald Kohn, strongly hinted in a speech yesterday that the Fed is not going to be cutting rates at its two-day meeting that concludes June 25. Kohn's key comment was:

"With the information now in hand, it is my judgment that monetary policy appears to be appropriately calibrated for now to promote both rising employment and moderating inflation over the medium term. But a large measure of uncertainty surrounds that judgment and as the economy evolves, so will the appropriate stance of policy."

There's a lot of other stuff in the speech about commodity prices, the Fed's role in helping drive them higher and so on. You know I've been harping on that issue for a while now.


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