Steven Wood Continued Quotations

With last week's Fed tightening, mortgage rates have continued to rise, so that further declines in housing activity are likely over the balance of the year. Nevertheless, robust labor markets and rising incomes have helped sustain housing at a relatively high level.

Although mortgage rates have declined over the past three weeks, mortgage applications volumes have continued to fall. This is partially due to the flat yield curve and partially due to tighter lending standards by financial institutions.

Increased demand in expanding economies abroad and continued robust conditions at home support the production outlook, given the low inventory environment. The Fed is sure to view the economy as expanding at too fast a pace now that manufacturing is coming back and consumption remains quite strong.

The level of economic optimism is still quite high, especially given the continued sluggishness in the economy, rising joblessness, corporate profits warnings and equity market volatility,