Insights and Analysis: Mortgage and Real Estate Capital Markets Update with Jeff Rosato, SVP of Capital Markets at Nationwide Mortgage Bankers.
Key Takeaways: Bond Market Trends and Fed Outlook
Mortgage rates have gone up for the fifth week, reaching the highest levels since August, due to uncertainty around the upcoming U.S. election and a Federal Reserve meeting on interest rates. If the election results are clear and the Fed lowers rates as expected, experts think the recent market volatility may settle down.
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.
“There is not much market-moving data being released this week, but markets could be extremely volatile with the U.S. elections pending and the FOMC decision on Thursday.”
This Week’s Economic Calendar
Economic data has been mixed, leading to uncertainty over a rate cut from the Fed in November. However, recent employment data weakness and receding inflationary pressures suggest the Fed may reduce the Fed Funds rate by 25 basis points on Thursday. It’s also anticipated they will continue rate cuts gradually in the coming months. While there is little market-moving data being released this week, markets could be highly volatile with the pending U.S. elections and FOMC decision. Markets favor certainty, and if election results are clear and the Fed cuts rates by 0.25 on Thursday as expected, volatility should ease, and calmness could return.
As of today, MBS prices are better by about 15-25 basis points compared to Friday’s close, and the 10-year Treasury is also rallying, down about 7 basis points to 4.29%. The bond markets will be closed next Monday for Veterans Day, and accordingly, the NMB lock desk will be closed for new locks and relocks.
We’ll keep an eye on the market for any updates—check back next week for the newest insights!
