Mortgage Market Report for Monday April 28th, 2008
This week's schedule has some of the biggest economic news of April.
On Wednesday, the Fed will release their Policy Statement and interest rate decision. For now, the Fed Fund Futures are pricing a 75% probability of a .25% cut to the Fed Funds Rate. As you know, Bond prices have reacted very poorly after Fed Rate cuts, due to the expectation that the cut will spur on inflation. If the Policy Statement leads Traders to believe this may be the final cut, it might just have the opposite effect, helping Bonds actually move higher with the reduced prospect of the Fed spurring future inflation.
Right on the heels of the Fed decision and statement, Thursday will bring the Fed's most favored gauge of consumer inflation, the Core Personal Consumption Expenditure Index (PCE). Especially since it will come after Fed day, it will be interesting to see the inflation read in light of the Fed's decision. And as if this weren't excitement enough for the week, Friday will bring the important Jobs Report, where early estimates are for a loss of 80,000 jobs.
Bonds will likely take their cues from action in the Stock market. For now, be prepared and ready to lock, as we have seen many daily reversals recently.
A quote from Benjamin Disraeli
"What we anticipate seldom occurs; what we least expected generally happens."Roger Herrick
www.ContactHerrick.com
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