Bank of America Corp. (BAC) News

WASHINGTON, Aug. 26 (UPI) -- U.S. investors are looking for clear signals from Federal Reserve policymakers, who have lately shown signs of disarray, policy analysts said.

"There's just a bunch of wildly different views being presented from both inside and outside of the Fed, and that is confusing markets," The Washington Post quoted Bank of America-Merrill (NYSE:BAC) Lynch economist Ethan Harris as saying.

Fed Chairman Ben Bernanke "needs to overcome this idea that the Fed is paralyzed," he said.

Diane Swonk, chief economist at Mesirow Financial, said Bernanke's style of encouraging open debate was "a good thing in general."

However, "It brings confusion to financial markets rather than clarity," she said.

The growing confusion is marked by increasingly vocal dissent within the ranks of the Fed's Open Market Committee. Federal Reserve Bank of St. Louis President James Bullard has said the economy is in danger of slipping into a deflationary trend marked by lower prices, which stalls the economy.

Taking the opposing viewpoint, Kansas City Fed President Thomas Hoenig has said leaving lending rates at historically low levels makes inflation a greater risk than deflation.

Underlying these arguments is the growing belief that the Fed has limited options to re-invigorate a stalled economic recovery.

Observers will be looking for signs of a clear policy direction during Bernanke's speech at the Fed's annual retreat in Wyoming Friday, the newspaper said.

WASHINGTON, Aug. 26 (UPI) -- Average interest rates for long-term mortgages followed treasury bond yields lower last week, the U.S. Federal Home Loan Mortgage Corp. (OTCBB:FMCC) said Thursday.

Lower yields on treasury bonds helped mortgage interest rates for 15-year and 30-year contracts set record lows, as rates fell for the ninth week out of the past 10, the government-sponsored mortgage broker said.

"Existing home sales plunged 27 percent in July, while (sales of) new homes fell 12 percent to a new all-time record low, which led to some market concerns that the housing market may slow the economic recovery," Freddie Mac Deputy Chief Economist Amy Crews Cutts said.

"As a result, long-term bond yields fell to the lowest levels since January 2009, allowing the fixed mortgage rates to ease to new record lows," she said.

In the latest weekly survey, Freddie Mac said interest rates for 30-year, fixed-rate contracts dropped from 4.42 percent with an average of 0.7 points, to 4.36 percent, a 39-year low.

Average interest rates for 15-year, fixed-rate mortgages fell from 3.9 percent to 3.86 percent. Points for 15-year mortgages averaged 0.6 during the week.

WASHINGTON, Aug. 26 (UPI) -- The U.S. Department of Labor said Thursday first-time jobless benefits claims declined by 31,000 in the week ending Aug. 21.

The decrease to 473,000 claims for jobless benefits countered a recent rise in claims. The four-week rolling average for initial claims rose by 3,250 to 486,750 from the previous week's revised average of 483,500.

The U.S. unemployment rate is 9.5 percent.

The report said the biggest increases in claims for the week ending Aug. 14 were reported by Puerto Rico with 2,190 additional claims, Wisconsin, which added 1,004, and New Jersey, which added 843, the report said.

For the week ending Aug. 14, the biggest decrease was reported by California with a decline of 5,275, followed by Indiana, where claims declined by 2,209, and Pennsylvania, where claims fell by 2,074, compared with the week ending Aug. 7.

State statistics lag a week behind the national report.