If you were looking for a respite in the markets after the meeting of the Federal Reserve’s Open Market Committee, you would be disappointed. This week the jobs report for September is being released, the first big news of the last quarter of the year — though it is based upon third quarter numbers. Because the Federal Reserve lowered expectations of growth for the fourth quarter, these jobs numbers will be watched closely.
A strong employment sector has the potential to increase momentum for economic growth in the fourth quarter and would make an increase in interest rates by the Fed a virtual certainty in December. We continue to note that the Fed meeting in November is less likely to produce changes because of its proximity to the election. Speaking of the election, starting from the end of this week, we have two jobs reports, another meeting of the Fed and a Presidential Election scheduled within approximately 30 days.
Thus, the potential for volatility in all the markets, from equities to interest rates, is exceedingly high for the near future. And a strong jobs report this week will increase that potential, because of the specter of a rate increase to follow all of these events. Where these things will lead, is anyone’s guess. We suggest you hold on for the ride. If you have already purchased a home, you are likely enjoying your low rates and payments. For those who wait, again, we don’t know what the future will bring.
Source: Origination Pro
October 4, 2016