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Looking more like an inflation hawk than her usually dove-ish self, Fed Chair Janet Yellen testified on Capitol Hill this morning.  Here are three main points out to that speech:

1. Gradual interest rate increases will be contingent on how soon interest rate increases begin. The longer the wait to raise, the less gradual subsequent increases may be.

2.  In regards to the current ability to originate new mortgage loans: “Dodd Frank standards have kept us from slack lending standards, but have had some unintended consequences” .

3. With regards to Puerto Rico, it is appropriate for Congress, but not the Fed, to step in as a creditor.

After a drop at the outset on the heels of a hot PPI (up 0.4%), pricing on mortgages is up 32bps from the opening bell.  This seems to be coming not from Ms. Yellen’s comments, but from outspoken economists rebuttals