Mortgage Backed Security Purchase Program Ending - RJ Baxter First Mortgage Corp Evergreen CO
As I have been writing about for months, today is D-Day for the end of the Mortgage Backed Security Purchase Program, the last day of the Fed's plan to purchase mortgage-backed bonds in an effort to stimulate the economy and lower mortgage rates.
So far, the end of the Mortgage Backed Security Purchase Program has not spelled disaster, as mediocre economic data has kept bond prices up for the time being.
However, we have already seen volatility today in the markets, with wild swings in bond prices. Some of this may be due to the end of the Mortgage Backed Security Purchase Program, but it may also be nervousness in the markets as a series of reports is due out the remainder of the week, and a light volume Good Friday could lead to some pricing fluctuation.
The biggie this week is the jobs report both for claims tomorrow and monthly data for March being released on Friday. Private sector jobs already reported worse than expected this morning- a positive for rates. Employment is always a big market mover, and in light of the end of the Mortgage Banked Security Purchase Program and the already jittery markets, it could be a wild couple days.
The Fed has also hinted that not only are they ending the Mortgage Backed Security Purchase Program, but they may actually switch teams and become a seller in the near future. A move like this will certainly add upward pressure to mortgage rates.
For now, rates remain low, and the markets have settled down from the volatility earlier today.
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