The Federal Reserve Is Meeting And What It Means To Your Mortgage Rate

Category: Mortgage Rates

Posted on in Mortgage Rates

The Federal Reserve Is Meeting And What It Means To Your Mortgage Rate

The Federal Open Market Committee begins a scheduled, 2-day meeting today to discuss the country’s monetary policy.  As is custom, the group will issue a press release to the markets upon adjournment. There are 8 scheduled FOMC get-togethers annually and the post-meeting press releases are among the most powerful market-moving events of the year. It’s not the Fed’s actual policy changes that causes fortunes to be won or lost, though. These changes can predicted and traded — and, therefore, hedged — on Wall Street using Fed Funds Rate Futures.  For example, Wall Street predicts with 97% certainty that the Federal Reserve will not make a policy change at this time. As opposed to than policy change, it’s the verbiage of the FOMC’s press release that can really move markets.  This is because the press release is a clear-eyed look into what the Federal Reserve thinks of the United States economy — its strengths, its weaknesses, and its threats. After its January 2009 […]

by jberman
Posted on in Mortgage Rates

What’s Ahead For Mortgage Rates This Week : March 16, 2009

Mortgage markets lost a little bit of ground last week, edging mortgage rates higher in a week marked by the largest stock market gains since November. Once again, mortgage rates couldn’t sustain a rally of more than 5 days.  Not since late-2008 have mortgage rates managed to fall two weeks in a row. Last week’s market was impacted by three distinct factors: Bank balance sheets weren’t as bad as feared Discussion started on new bank valuation methods Traders got optimistic that “the worst is over” The rally will likely continue into this week, too.  This after the 60 Minutes interview with Ben Bernanke in which the Fed Chief said he won’t let big banks fail and that the recovery will likely begin later this year. It’s the first interview with a sitting Federal Reserve Chairman in history. Coincidentally, the Federal Reserve will be in the spotlight this week as it concludes a two-day meeting Wednesday after which the Fed will issue its […]

by jberman
Posted on in Mortgage Rates

What’s Ahead For Mortgage Rates: February 23, 2009

Existing Home Sales are expected to rise again, placing upwards pressure on home prices. Traders brushed off Tuesday and Wednesday’s passage of the American Recovery and Reinvestment Act and the President’s mortgage relief plan, respectively. It showed how unsure markets remain about the stimulus package and its probable impact on the economy. As a result, mortgage markets worsened last week, albeit slightly. It marked the 4th week out of five in which mortgage rates rose. However, there were a few notable new items for American homeowners and home buyers last week: The signed-into-law stimulus package includes a first-time home buyer tax credit Additional banks joined the “no foreclosure” movement Fannie Mae re-opened guidelines so that real estate investors can own and finance 10 properties, up from 4 Taken separately, these points aren’t especially noteworthy. Together, however, they’re very important. In reducing the number of homes for sale while, in turn, spurring demand for them, last week’s policy shifts should provide key support against falling home values […]

by jberman
Posted on in Mortgage Rates

How The Stimulus Bill Indirectly Lowered Mortgage Rates

The American Recovery and Reinvestment Act of 2009 was signed into law Tuesday in Denver, Colorado.  Also Tuesday, stock markets fell near their November 2008 lows. The two moves are related. With each new stimulus; with each potential jumpstart of the economy, Wall Street questions whether the federal push will be enough to make an impact. Traders ended undecided on that issue today, but resolute in something else — that whatever change the stimulus bill will bring, it’s not going to come fast enough to help. The sell-off in equities was a boon to home buyers.  For the first time since early-December, mortgage markets gave a sustained rally, extending gains from the 8:30 AM market open through the 4:00 PM market close. Conforming mortgage rates were down on the day.  Longer-term, though, this pattern won’t likely last.  Not only will the stock market regain its balance and draw dollars back, but, more importantly, the stimulus bill contained verbiage increasing the national debt ceiling […]

by jberman
Posted on in Mortgage Rates

J.BermanGroup Market Update: February 17, 2009

High unemployment rates are one reason why the economy is struggling. In anticipation of a strong, government-led stimulus plan, mortgage markets improved with fervor early last week only to fizzle with equal speed as efforts fell short of expectations. Neither the Fed, nor the Treasury nor Congress gave markets what they wanted. Between Monday and Friday, mortgage markets were essentially unchanged, ending a 4-week slide.  From day-to-day, however, rates were quite volatile. The biggest shift of the week occurred late-morning Friday, in advance of the early-market closing.  As the terms of the Congress’ pending stimulus package became more clear, the piling-on of national debt suddenly spooked Wall Street, re-igniting traders’ fear of inflation. It’s strange, in a way, because the final package represented fewer dollars than originally announced and markets had all week to come to terms with the government’s three-pronged response to economy. Nevertheless, traders saved their angst all for the last 90 minutes of the week.  Fears of inflation led to a […]

by jberman
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