Morning Report - Janet Yellen soothes the market

Vital Statistics:

	Last	Change	Percent
S&P Futures	1940.6	21.8	1.14%
Eurostoxx Index	3120.6	101.2	3.35%
Oil (WTI)	45.34	0.4	0.96%
LIBOR	0.326	-0.001	-0.31%
US Dollar Index (DXY)	96.47	0.473	0.49%
10 Year Govt Bond Yield	2.18%	0.05%
Current Coupon Ginnie Mae TBA	104.2	-0.1
Current Coupon Fannie Mae TBA	103.8	-0.1
BankRate 30 Year Fixed Rate Mortgage	3.87

Markets are higher this morning after Janet Yellen soothed concerns over global growth and said the Fed is probably still going to raise rates this year. Bonds and MBS are down.

I see a headline coming across the tape that House Speaker John Boehner is going to resign from Congress, according to the New York Times. Don't see anything on the NYT site, but if so, this is big news. 

The third revision to second quarter GDP came in at +3.9%. Personal consumption was revised upward to 3.6% from 3.1%. Inflation remains more or less at the Fed's target rate of 2%. 3Q GDP forecasts are much lower, in the 1% - 2% range.

Consumer sentiment slipped in September, according to the University of Michigan. This is the lowest reading in a year.

Janet Yellen spoke yesterday, and said the Fed will probably still raise rates this year, however they were willing to let the labor market run hot for a while. The markets were cheered by these statements. She mentioned getting discouraged workers back into the workforce, and that is somewhat new - historically, they have focused on unemployment and wage inflation. Here is a deeper dive into what she was talking about. Interestingly, the Fed thinks that early on ZIRP had little to no effect on the economy, and that only now, are we starting to see the economic benefits of ZIRP. IMO, it has always been about real estate prices. Once real estate bottomed in 2011 / 2012 the economy began a more robust recovery. 

The government has taken an even more expansive view of housing discrimination. Now, it doesn't matter if your lending track record is okay. Not having enough bricks and mortar branches in minority neighborhoods is a crime nowadays. Apparently the government had no issue with Hudson City Bank's actual lending practices, just the location of their branches. The government got $35 million out of them for this apparent "redlining."