Rate Watch 9/26/22 - The slide continues

By
Mortgage and Lending with Watermark Capital NMLS #311662

The Fed raised rates by 0.75% as the market expected. Last week’s action was similar to all weeks with a Fed decision. The days leading up to the decision were rough and then the market rallies on Fed Chairman Powell’s speech. After all, he has to raise rates without spooking markets into a massive panic-sell-off.

 

Speaking of speeches, we hear from a lot of Fed members this week. They will look to support their decision from last week and may be more aggressive in their language than the chairman was. We also get some housing data.

 

Here’s what’s in store this week

 

Monday

 

  • Boston Fed President Collins Speaks
  • Atlanta Fed President Bostic Speaks
  • Dallas Fed President Logan Speaks
  • Cleveland Fed President Mester Speaks

 

Tuesday

 

  • Chicago Fed President Evans Speaks
  • Fed Chairman Powell Speaks on Digital Finance (crypto enthusiasts tune in)
  • San Francisco Fed President Daly Speaks
  • US Home Price Index
  • St. Louis Fed President Bullard Speaks
  • New Home Sales

 

Wednesday

 

  • Atlanta Fed President Bostic Speaks
  • Fed Chair Delivers Opening Remarks
  • Fed Gov. Bowman Speaks
  • Chicago Fed President Evans Speaks

 

Thursday

 

  • Initial and Continuing Jobless Claims
  • St. Louis Fed President Bullard Speaks

 

Friday

 

  • PCE index
  • Fed Vice Chair Brainard Speaks
  • 5 Yr Expected Inflation Data
  • Fed Gov Bowman Speaks
  • Richmond Fed President Barkin Speaks on What’s Driving Inflation
  • New York Fed President Williams Speaks

 

As a reminder, most of the current stances of the Fed members remain Hawkish. Dallas Fed President  Black was replaced by Logan in August and Logan is moderate.

 

 

Chart Check (see above)

 

The chart above is ugly. However, I do expect us to carve out a bottom soon as we are finishing the month. Historically, September is the worst month for markets. Depending on what Fed members say this week, things can get volatile. Monday starts us off with Mester who is on the hawkish side.

 

 

My long-term thesis on rates still stands. However, I do expect more pain before things get better. We have two more rate hikes this year: one in November and the other in December. I expect November to be 75bp as well, but I will update that as the data comes in.

 

Just like all of 2022, I am not floating rates. We should get some relief once we carve a bottom and establish a support line, but it’s too much of a gamble to time perfectly. However, I do expect an amazing refi opportunity in the next 12-24 months.

Posted by

Matt Brady

Branch Manager, NMLS ID#311662

(858)342-8659 cell |

matt.brady@watermarkhomeloans.com  
8885 Rio San Diego Dr │ Suite 201  San Diego, CA 92108     

 

BIA SanDiego 19 year Member and P2 Sponsor

 

BIA SMCBoard Member since 2012

 

 

 

 

Comments (1)

Bill Salvatore - East Valley
Arizona Elite Properties - Chandler, AZ
Realtor - 602-999-0952 / em: golfArizona@cox.net

Hi,

Enjoyed your blog page, and I added you as a friend. I would love the follow back. Thanks Bill

Sep 26, 2022 01:11 PM
Matt Brady

Hi Bill, I was already your follower but thanks for the support.

Sep 28, 2022 08:47 AM