FED ALERT !!
Why my clients choose me? I have my thumb on the pulse on whats going on in the market. This FED NEWS is saving my clients THOUSANDS Versus the uniformed Loan Officers out there who Locked in their clients rate earlier today because they are not informed.
MBS are up +13/32 (FNMA 30-yr 3.0 at 101.25), around 17/32 above morning levels, and near the high for the day. Favorable repricing took place. Higher than expected CPI inflation data caused a small decline in MBS this morning. However, a dovish Fed statement (see below) caused a large rally in MBS this afternoon. The Dow is up 75 points. Tomorrow, Jobless Claims, Philly Fed, and JOLTS will be released.
As expected, the Fed did not change the federal funds rate. The statement contained guidance which reduced the expected number of rate hikes in 2016 from four to two. Reasons for this included a downgraded outlook for U.S. economic growth and inflation and concerns about the pace of global economic growth. The statement was good news for mortgage rates, as this guidance pushes tighter monetary policy farther into the future, including the expected timeline for the Fed to begin to reduce its large holdings of MBS and Treasuries. The added demand for MBS from the Fed helps to keep mortgage rates low.