According to a Reuters report this week, available economic data suggested that the housing sector would be seeing another drag in growth. Moreover, the report said borrowing costs were anticipated to rise. These were reportedly stemming from the curreny condition of the US economy as it is still reeling from the effects of the government shutdown.
This week, the Federal Open Market Committee, the policy maker of the US Federal Reserve, said, "Fiscal policy is restraining economic growth."
The Fed on the other hand, had announced its decision to continue with its monthly asset-purchasing program amounting to USD85 billion.
Societe Generale global head of foreign currency strategy Kit Juckes said, "Fears about what happens as a result of higher bond yields have gone, but the housing market recovery has stalled."
Bank of West Capital Markets division vice president Paul Montaquila disclosed, "The economic data we're getting and the government shutdown have given them the fodder necessary to remain with the purchases and the accommodative interest rate environment. It would take something dramatic from here, perhaps a much-better-than expected holiday season, for rates to go higher. We will be in this trading range for quite some time with 2.5 percent on the 10-year yield being the mean and a range of about 2.35 percent to 2.75 percent."
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