No Recession Prediction From Paulson and Bernanke
14 February 2008
Rates were up about .375 to price this morning on testimony from Fed Chair Ben Bernanke and Treasury Secretary Paulson.
In testimony to the Senate, Bernanke and Paulson surprised Wall Street by stating that they did not believe the economy would enter a recession this year, although it continues to be plagued by housing weakness.  This also gave mortgage markets the hint that the Fed may now be less likely than expected to cut rates further.
December’s Goods and Services report came in lower than expected but had no impact on rates, nor did the weekly jobless claims which posted today lower than expected.
Tomorrow we look forward to the Industrial Production Data for January and the Preliminary January Index of Consumer Sentiment from the University of Michigan. This will give us new perspective on the health of the manufacturing sector and on consumer confidence. Both reports could affect mortgage rates.
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