"The Fed is certainly going to want to get more information before they make this move, particularly given how violent the financial-market reaction has been to tapering"
- Julia Coronado, chief economist for North America at BNP Paribas and a former Fed economist
The U.S. jobless rate fell, the economy added more-than-expected working places and the economy built up steam in the second quarter. All these indicators may reflect the broaden recovery in the world's largest economy, raising possibility of the announcement of QE tapering during September Fed's meeting. On contrast, applications for U.S. home loans tumbled due to high mortgage rates, while refinancing activity plunged to its lowest in more than four years.
The Mortgage Bankers Association said the gauge of mortgage application activity sank 13.5% in the week ended September 6, down from a 1.3% gain a week earlier. It means that both refinancing and home purchase demand dropped. The data also puts the index at the lowest level since November 2008– the depths of the global financial crisis. Meanwhile, borrowing costs have soared more than 1% since late May on speculations of the possible tapering.
The Fed's stimulus programme has been one of the main factors that boosted home values in the United States, however, many economists believe that a pullback now may offset the property market's nascent recovery.
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