"You don't know what you got until it's gone." Those lyrics from the band Chicago's 1980's hit could apply to the chatter from the Fed last week, as the debate about whether to continue their latest round of Bond buying, known as Quantitative Easing, continues.
What is Quantitative Easing? Quantitative Easing is the concept of the Fed becoming a buyer of Treasuries and Bonds to try and stimulate the economy.
Why does the Fed do Quantitative Easing? Oftentimes, the Fed does Quantitative Easing when they are hoping to (1) create inflation and avoid a deflationary economy, (2) lower the unemployment rate, and (3) boost Stock prices. For this latest round of Quantitative Easing, the Fed especially wanted to help stimulate the housing market and our economy overall.
And the housing market has shown signs of improvement lately. While Housing Starts in January declined overall, single family Housing Starts rose to its highest rate since July 2008. Building Permits, a sign of future construction, also came in above expectations. These reports were the latest in a series of reports showing that the housing market is recovering.
What is all the Fed chatter about? Last week, the minutes from the Fed's January meeting of the Federal Open Market Committee were released. The minutes noted that several Fed members would like to halt the Quantitative Easing program sooner than planned, because they are concerned about inflation. However, it's important to note that last week's Producer and Consumer Price Index Reports showed that inflation at both the wholesale and consumer levels remained tame in January.
On the flip side, other Fed members are concerned that halting the program too soon could end the recovery in the housing market, and hinder our economic recovery overall. And given that the increase in the payroll tax in January left consumers with less money in their paychecks, and that Walmart has reported that February sales were the weakest in seven years, this is an important factor to consider as well.
The biggest take away is that now remains a great time to consider a home purchase or refinance, as home loan rates remain near historic lows. Let me know if I can answer any questions at all for you or your clients.
- The week starts and ends with a measure of how the consumer is feeling with Tuesday's Consumer Confidence Report and Friday's Consumer Sentiment Index.
- There's a double dose of housing news on Tuesday, with the Case Shiller Index and New Home Sales. Plus, look for Pending Home Sales on Wednesday.
- We'll get a sense of how the economy is doing with Wednesday's Durable Goods Orders, which measures orders for products used for an extended period of time, and Thursday's Gross Domestic Product, the biggest picture of economic activity.
- Also on Thursday, Weekly Initial Jobless Claims will be reported.
- Ending the week, Friday brings Personal Consumption Expenditures, the Fed's favorite measure of inflation, along with Personal Income and Spending and the ISM Index.
When you see these Bond prices moving higher, it means home loan rates are improving -- and when they are moving lower, home loan rates are getting worse.
To go one step further -- a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.
As you can see in the chart below, Bonds and home loan rates remain steady near record best levels. I'll continue to monitor them closely.
More than nine out of ten businesses spend six or more hours online each week maintaining a presence on social media. And while you probably already know the benefits of social media--better engagement with your market, better website traffic, improved sales--you might not realize that some days (and times!) are better than others for posting to social media.
Social media analytics firm Socialbakers showed Facebook posts achieve 50% of their total reach within 30 minutes of being posted. In other words, half of all the people who will see your post have seen it within the first half-hour after you post it. Not only that, by the time 90 minutes have elapsed, your average post reaches less than 2% of total audience for the next seven hours before it drops off completely.
That's why timing your posts properly is the best strategy. Here are the best days and times to post according to current research from Social Caffeine:
BEST: 1 p.m. to 3 p.m., Monday through Thursday
WORST: 8 p.m. to 9 a.m. Avoid after 3 p.m. Friday and weekends
BEST: 1 p.m. to 4 p.m., peaking on Wednesdays at 3 p.m.
WORST: 8 p.m. to 8 a.m., avoiding weekends
BEST: 7 a.m. to 9 a.m. OR 5 p.m. to 6 p.m., Tuesday through Thursday
WORST: 10 p.m. to 6 a.m., avoid Monday and Friday
BEST: 2 p.m. to 4 p.m. or 8 p.m. to 1 a.m., peaking on Saturday morning
WORST: 5 p.m. to 7 p.m. and late afternoons