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Saturday’s: 9AM 1590 AM/97.9 FM KVTA
Sunday’s: 7AM K-EARTH 101 FM
Your PM Lock Commentary has just been posted.
For a full breakdown of today’s analysis:
MBS OVERVIEW
Taking to the House: Weekly Mortgage Applications improved again. This time by 3.0%. Refinances were up by 4.9% and Purchases were up by 2.2%
The Talking Fed: Today at 2 pm ET we get the Federal Reserve’s latest interest rate decision and policy statement as well as their Economic Projections which the bond market will look at for forward guidance on the pace of future hikes and they “terminal” rate which is the max rate before the Fed pivots towards lowering rates in the future.
The Fed increased the FF rate 25 bps as was mostly expected to 4.75%/5.00%.Powell reiterated the banking system is in good shape. The policy statement said “Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation. The extent of these effects is uncertain. Powel reminded inflation has moderated as we all know but added its too high, that isn’t news, that is what the Fed officials have been saying for months. The economy remains stronger than what the Fed has been expected, strong employment and consumer spending, but is slowing. The FOMC anticipates that some additional policy firming may be appropriate to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. Powell commented that until two weeks ago the Fed was poised to increase rates more than what markets had been expected. That remark counters the prior statements from higher rates are on the way, to maybe. Powell pointed to the banking issues as too new to make any major changes to forecasts or outcomes, it’s just been 12 days. Powell still looking to higher rates later this year but that is nothing to bank on (pun?). He remarked that wage pressures are easing. Markets and the Fed worrying more about the coming credit crunch that a week ago we didn’t hear much about. Its coming, and the reaction from lenders is a help in weakening economic outlooks, like the Fed tightening.
Powell said the Fed will increase and review the Fed’s supervision of banks; the Fed supervises non-national banks. Stronger regulations and supervision.
Tomorrow weekly jobless claims expected +195K. Feb new home sales expected 645K from 670K.
The stock indexes were choppy since the FOMC meeting and Powell’s press conference. Interest rates declined and MBS prices increased. The 10 on its way back to test once again 3.40% at its low during Powell the note momentarily dropped to 3.45%.
