FED NEWS 7/27/2016
MBS are up +8/32 (FNMA 30-yr 3.0 at 103.22), around 7/32 above morning levels, and near the high for the day. Favorable repricing took place. The Fed statement (see below) pushed MBS to their highs this afternoon. June Pending Home Sales rose 0.2% from May, below the consensus for an increase of 1.0%. The Dow is up 5 points. Tomorrow, Jobless Claims will be released at 8:30 et. The results from the 7-yr Treasury auction will come out around 1:00 et.
As expected, the Fed made no change in the federal funds rate. The statement modestly upgraded the performance of the U.S. economy. In particular, the Fed noted strength in the labor market and in consumer spending. Investors now assign about a 50% chance of a rate hike in 2016.