Insights and Analysis: Mortgage and Real Estate Capital Markets Update with Jeff Rosato, SVP of Capital Markets at Nationwide Mortgage Bankers
I hope everyone enjoyed the weekend! Here is this week’s update on the major bond market indices, scheduled Federal Reserve meetings, upcoming market-moving economic data releases, and general bond market trends.
“The FOMC meets this week with the official interest rate announcement coming at 2:00 on Wednesday followed by Chairman Powell’s press conference. It is widely expected that the Fed will not make any changes to its benchmark rate.”
The FOMC meets this week with the official interest rate announcement coming at 2:00 on Wednesday followed by Chairman Powell’s press conference. It is widely expected that the Fed will not make any changes to its benchmark rate. Market expectations have shifted to just one rate cut expected this year. The most likely scenario being a .25% rate cut at the November or December FOMC meeting. There is still a chance that a cut could come earlier at the September meeting if new data support the Fed’s case, but it is no longer a likely scenario.
The FOMC has insisted all year that they do plan to ease monetary policy, but they have to see inflation subside adequately first in order to get started. This week there will be fresh inflation data released including the CPI on Wednesday and PPI on Thursday. Markets will digest the Fed’s statement on Wednesday as well as the reaction to the fresh inflation data this week to get a better picture of rate expectations for the next few months. If inflation beats expectations this week then that would almost certainly push the first rate cut out until November at the earliest.
Today MBS prices are on the decline again in a continuation of Friday’s selloff. Prices are worse by about 10-20 basis points compared to Friday’s close, and the 10-year Treasury is up a few basis points to 4.46%.
Have a great week!
