This week the markets finally seem to be returning to normal after the last few week’s wild ride. It all started back on 6/19 when the Federal Reserve Board (FED) President Ben Bernanke announced that the economy is showing signs of improving and because of this the FED is thinking about winding down their Quantitative Easing(QE) program. The QE program is what the FED has been using to keep rates low and the thought that they may be slowing it down freaked investors out and sent interest rates through the roof.
On Wednesday Ben Bernanke held a press conference where he attempted to calm down the markets by stating that the FED will not be slowing QE now. Bernanke’s comments seem to have worked as we have seen rates drop over the last few days. However, rates are not back down to where they were before 6/19 and personally I don’t believe they will ever return to those lows. The markets over reacted on Bernanke’s initial comments, but the economy is showing signs of improving and as long as it continues to do so the long term trend for rates will be up.
Tags: Ben Bernanke, market preview, mortgage rates outlook