Insights and Analysis: Mortgage and Real Estate Capital Markets Update with Jeff Rosato, SVP of Capital Markets at Nationwide Mortgage Bankers
Welcome back to our Capital Markets Weekly Update! We hope you had a rejuvenating weekend. Let’s dive into this week’s overview of the major bond market indices, anticipated Federal Reserve meetings, upcoming economic data releases, and the prevailing trends in the bond market.
“The expectation is that the Fed will keep rates as is this week. However, investors will be looking for updated thoughts and strategy from the Fed as the expectations for rate cuts has shifted dramatically over the last few months.”
Market Trends and Insights
In recent weeks market participants have pushed hopes of rate cuts back to July or September after a string of better than expected economic data and persistent inflation. The futures markets have drastically pared back bets on the amount of rate cuts that will be made in 2024 to a total of 50 basis points of cuts, which is down sharply from 150 basis points at the beginning of the year. Recent commentary from the Fed suggests that they are in no hurry to cut rates and that rates may stay higher for longer.
Upcoming Economic Events
This week there is some important scheduled economic news. Most importantly all eyes will be on the FOMC rate decision on Wednesday followed by Chairman Powell’s press conference. The expectation is that the Fed will keep rates as is. However, investors will be looking for updated thoughts and strategy from the Fed as the expectations for rate cuts has shifted dramatically over the last few months. On Friday, the April U.S. employment report will be released. If April employment comes in stronger than expected then the Fed has more reason to leave rates elevated.
Current Market Outlook
Today rates are down nicely compared to Friday’s close and the 10 year Treasury is also sown by about 6 basis points at 4.61%.
That wraps up this week’s Capital Markets Weekly Update. Have a productive and successful week ahead!
