Anticipation is building for Federal Reserve Chairman Alan Greenspan's biannual Humphrey-Hawkins testimony to Congress, which is set for this week. Economists are predicting the Fed chairman will likely reiterate his tune from this year's first Humphrey-Hawkins report, in which he said monetary policy remained accommodative despite a steady string of rates hikes. The report is seen as a significant indicator of the economy's health and of Fed plans on future rate movements.
Bear Stearns economists note that, since the first report in February, several market indicators are at roughly around where they were at that point. Chief U.S. economist John Ryding and his team noted in their latest research report that, while commodity prices have risen thanks to the surge in oil prices, 10-year Treasuries remain at low yields and fixed-rate mortgage rates are unchanged. The 10-year was at 4.14% last Wednesday, while the average 30-year mortgage rate is 5.62%. "We expect the song sheet that Greenspan sings from next week will look very much like February's," they wrote.
