FED ALERT 6/15/2016
MBS are up +5/32 (FNMA 30-yr 3.0 at 103.03), around 4/32 above morning levels, and near the high for the day. Some favorable repricing was seen. MBS moved higher following the release of the Fed statement (see below). The Dow is down 30 points. Tomorrow, CPI, Jobless Claims, Philly Fed, and NAHB Housing will be released.
The Fed statement and press conference contained few surprises. The Fed made no change in the federal funds rate, and little new information was provided about the timing of the next rate hike. However, the projections from Fed officials for the path of rate hikes in coming years showed a significantly slower pace than the last set of projections made three months ago. This slower expected timeline for tighter monetary policy was positive for MBS.