market update: Fed Cuts = lower mortgage rates, right?
- 02/19/08 10:40 AM
Is a Fed rate cut really good news for mortgage rates? The facts may be surprising. The Fed can only control the Discount Rate and the Fed Funds Rate. This is very different from mortgage rates. A mortgage rate can be in effect for 30-years while a rate set by the Fed can change from one day to another. On the graph see how the interest rate on the 30-Year Fixed FNMA have been on the rise since the last couple of Fed Rate Cuts. It is often said history repeats itself, right? Today, the mortgage bonds dipped -135bp, which is the biggest dent … (2 comments)
market update: Last Friday's New Record
- 02/11/08 05:51 PM
The existing dynamics between the financial market, and the solutions that mortgage professionals cater to borrowers to help them navigate on this volatile environment, is one of the reasons I love my career. Every day I look forward to see how economic reports influence the traders' investment decisions in the mortate bond and stock market... Last Friday's Initial Jobless Claims were reported at 356,000, that was above expectations of 340,000. It is important to notice that in the review of the previous week claims increased from 375,000 to 378,000. The most significant average movement was on the last four weeks where Initial Claims increased … (0 comments)
market update: It is not what you say, but how you say it!
- 02/05/08 05:51 AM
The early release of the ISM Report caught traders by surprise. How problematic is that? First, the 44.6 reading was waaay below expectations, considering that Economists were expecting a 53.0. This data indicates that the service sector is shrinking for the first time in almost five years, implying economic slow down. Second,the markets are trying to figure out if the slowing in the manufacturing and the service sector is a clear indication that we are indeed heading towards recession. By now this is no surprise, however the cause of uncertainty this morning was a combination of bad news and how they were … (2 comments)
Dear reader, Mortgage Bonds were in rally mode this morning after Retail Sales, showed its weakest growth in five years with an overall annual growth rate of 4.2%.The NY State Manufacturing Index , and the Producer Price Index(PPI) were reported lower than expectations. When excluding volatile energy and food prices, the Core PPI matched the consensus forecast. With this economic data, I don't see why the Fed should not have reasons to cut rates by .50%, and in fact it seems like traders are now hoping the Federal Reserve may slash rates before its next two-day session ending on Jan. 30. Why do you need a Certified … (0 comments)
market update: Advice: Why You Should Get Updates From Your Loan Officer
- 01/11/08 07:07 AM
The trade deficit widened to -$63.1 Billion, its highest level in 14 months. Economists were expecting a -$59.5 Billion deficit. According to CCNMoney, "The growth in exports has been a major factor cushioning the blow to the economy from the slump in housing and a severe credit crunch. However, with oil pushing imports up sharply, analysts believe the help from trade in the final three months of last year will be shown to have been significantly smaller. Given this 9.3% increase in trade deficit the next thing we have to ask ourselves is, what will be the impact on the economy? … (0 comments)
market update: Mortgage Market Update
- 01/10/08 07:09 AM
Today's Initial Jobless Claims were reported at 322,000, which was below expectations of 337,000 and the lowest weekly total since November 3. The four-week moving average for claims dropped to its lowest level in a month by falling 3,000 claims to 341,000. Expectations of weaker economic performance is serving to drag down mortgage rates. The highlight of the day was Chairman Ben Bernanke's speech. Lenders and the traders were looking for clues or hints about where the Fed will take interest rates when they next meet on January 30 to decide monetary policy. In regards to the fear of recession Mr. Bernanke said … (2 comments)
Is a Fed rate cut really good news for mortgage rates? The facts may be surprising. The Fed can only control the Discount Rate and the Fed Funds Rate. This is very different from mortgage rates. A mortgage rate can be in effect for 30-years while a rate set by the Fed can change from one day to another. On the graph see how the interest rate on the 30-Year Fixed FNMA have been on the rise since the last couple of Fed Rate Cuts. It is often said history repeats itself, right?;)
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