– Patrick Dunn, Westwood Mortgage Inc. & MMG Weekly
patrick@westwoodmortgage.com
The market had a busy week …and the Fed took center stage, with the “Minutes” from the last Fed meeting being released, as well as several members out and about on the speaking circuit.
While the Fed speakers didn’t give any market-rattling comments, the Fed Meeting Minutes were a different story. Remember that the Minutes are the “Fed Unplugged”, giving all the commentary between voting and non-voting members, before the carefully crafted formal Policy Statement is released to the public. The Fed intentionally delays the release of the Minutes, so the market has time to interpret and adapt to the Policy Statement itself, before they throw the “off the record” discussion into the mix for review and analysis.
The Minutes revealed that although the decision at the meeting was to leave the Fed Funds Rate unchanged, Fed members remain concerned about inflation, as recent indicators show that inflation is stubbornly remaining at a level above the Fed’s comfort zone of 1 – 2%. Bonds didn’t like the inflationary concerns, and lost some ground…with home loan rates worsening just slightly. The Fed is leaving an open door for more hikes ahead – as well as the possibility of cuts – completely dependent on what the incoming economic data tells them in the coming months. And a highly watched measure of inflation is due out next week.