Federal Reserve Chairman Jerome Powell has been out there again sounding the alarm about the potential for further damage to the economy from the coronavirus pandemic.
In his newest remarks, he worried aloud about the possibility of a second round of infections — which he said could bring a longer and more feeble recovery.
The Fed’s words and actions have been helping to push mortgage rates to one new all-time low after another, and the chairman’s newest statements could keep rates heading downward.
That would mean even better deals for borrowers buying homes and for homeowners looking to mow down their monthly payments by refinancing.
Powell’s latest on the pandemic
For weeks, Powell has been on a kind of worry tour, spreading the message through speeches and TV appearances that the coronavirus pandemic is hammering the U.S. economy worse than anything we’ve seen since World War II, and urging the government to do more.
The U.S. House has said yes to giving Americans another batch of $1,200 relief payments — which have been going out by check, direct deposit and debit card — but the Senate so far hasn’t addressed the idea of more of these so-called stimulus checks.
In his latest comments, Powell said raised concerns about additional COVID-19 flare-ups.
“A full recovery of the economy will really depend on people being confident that it’s safe to go out,” the chairman said, during a Princeton University webinar on Friday. “A second wave would really undermine public confidence, and might make for a significantly longer recovery, and weaker recovery.”
Powell’s previous warnings have helped to push mortgage rates lower and lower, and his new words could bring more of the same.
“Economic worries often do move interest rates, and as one of the most influential economic policymakers in the U.S., Chairman Powell’s words are very closely watched for future guidance,” says Brendan Philips, capital markets analyst with the online mortgage lender Better.com.
The ongoing fears about the economy have had investors flocking into Treasury bonds as a safe place for their money. Bond prices have been rising, bond interest has been falling, and mortgage rates have gone along for the downhill ride.
Rates on 30-year fixed-rate mortgages are averaging a record-low 3.15%, according to mortgage giant Freddie Mac, but you can now find rates under 3% if you shop around enough.
Powell stands firm against negative interest rates