The Petalumahomes.com Realty WebLog

The new, improved, and more transparent Fed is a far cry from the days of “The Cryptic One”…Former Fed Chair Alan Greenspan, who was famous for his hidden messages. After a Greenspan speech, many traders were left scratching their heads and wondering what exactly was said. In sharp contrast, Bernanke has been very clear and easy to understand.

More importantly, Ben has done a good job of keeping inflation under control. The latest read on inflation was tame for last month, as a large jump in energy costs were offset by meek automobile, housing, and clothing prices. This suggests that higher oil prices haven’t yet pushed up the prices of other goods overall.

But one topic that is still cloudy is the Fed’s next move on December 11th. The latest chatter from the “more transparent” Fed indicates that the Fed will not cut - but traders in the pits are betting the ranch on another quarter-point cut. One thing is very clear - this topic will be debated right up until the Fed makes the announcement.

Bonds and home loan rates saw quite a bit of activity in the holiday shortened week, but ended up exactly where they started.

The most interesting news of note for the coming week will be the latest housing data, coming with Tuesday’s release of the Housing Starts and Building Permits report. Also on Tuesday, the Fed “unplugged”…the Minutes from the last Fed meeting will be released, providing the commentary and discussion between both voting and non-voting members. This may provide additional insight into the Federal Reserve’s recent decision to cut rates by another quarter percent - and any unexpected comments could cause some movement in Bonds and home loan rates prior to the Thanksgiving Holiday.