Today's Fed announcement had no impact on mortgage rate movement, and minimal impact on intraday bond market volatility. Well before the Fed announcement, the bond market was already slightly weaker compared to yesterday's latest levels. As a result the average mortgage lender set rates just a hair higher. Despite the increase, 30yr fixed rates are only 0.05% above the low of 7.30% seen last week and only 0.02% above yesterday's mark of 7.33%. Recent upward pressure is a factor of improvement in investor sentiment surrounding the tech sector.
The Federal Open Market Committee approved the following statement for release by a 12 10 – 0 2 vote: The Committee decided to raise maintain the target range for the federal funds rate by 1/4 percentage point to at 3-3/4 to 4 percent, in support of the Federal Reserve's dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system. Economic activity is expanding at a solid strong pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital…
The other day I went to Costco, and for $5.99 bought a pumpkin pie the size of a hubcap. What inflation? Costco’s hot dog/soda combo or the rotisserie chicken are loss leaders, but actual gasoline, beef, lettuce, restaurant meals, goods from overseas, and other items’ price changes have kept inflation in the headlines and impacted mortgage rates. (Other headlines include Fannie Mae earning $4.2 billion in the 3rd quarter; more below.) What about water prices and availability… are they important to homeowners or potential buyers? What happens when you combine something like clean water with a…
Coreweave stock moved higher again overnight and Coreweave bond yields continued lower, with some issues now back to yields seen 2 weeks ago. Treasuries/MBS have been doing their best to hold sideways after last week's rally, but can only do so much when that rally was driven by factors that are visibly unwinding. As for today's Fed announcement, the focus will be on the press conference in case markets can glean any clues about how the Fed's anticipated rate hike path may or may not line up with market expectations (there is no dot plot today).
Boring, Sideways Day. Does Wednesday's Fed Announcement Even Matter? Neocloud concerns continued to experience a small correction/consolidation after last week's surge. Interest rates could have justified a bit of weakness as a result, but managed to hold fairly steady. Bond market indecision likely has more to do with that and less to do with any sort of Fed Day anticipation. Markets have almost fully priced in a "pause." Any Fed-induced volatility would thus be dependent on verbiage--either in the announcement itself or the 2:30pm ET press conference. This is one of those Fed meetings that…
It was a remarkably calm day for the mortgage market on two separate levels. First off, the average lender set this morning's rates right in line with yesterday's latest levels. Additionally, there were very few intraday changes (and in those cases, rates improved modestly). [thirtyyearmortgagerates] All of the above is made possible by the fact that the bond market stayed right in line with yesterday's levels all day long. This has happened for two straight days now, and it's the sort of stability that seemed like a distant memory several weeks ago. Will it last? There's never any way to…
The ancient Chinese philosopher Sun Tzu said, “Sometimes the best victory is the battle that was not fought.” In a shrinking residential market there are a lot of potential battles, for example: “Rob, are you hearing that some IMBs are not charging an origination fee or putting caps on LO comp for jumbo loans?” Of course, especially if the independent mortgage bank, or broker, is in an area where’s you’re battling it out with credit unions and banks. If you have a $2 million loan, and an IMB’s LO is charging a point, that’s $20k, but if an originator at a CU or depository bank is charging…
"Neocloud" has entered the commentary. This is shorthand for the market segment in which Coreweave operates. Neocloud companies have been the epicenter of recent concerns in tech that have helped fuel the mid October bond rally. Their negative momentum leveled off last Thursday--the same time bond yields bottomed. Neocloud stocks are up sharply this morning and their bond yields are falling. Coreweave yields are back to last Wednesday's levels (though still hugely elevated from early October levels). The consolidation mirrors the bond market over the past several sessions, although…
Bonds Hold Ground Despite Some Healing in Tech Monday was exceptionally uneventful for the bond market--as is more often than not the case for data-free Mondays without any other major developments. There were some minor developments though. Tech stocks bounced back a bit, closing at their best level since last Wednesday. Corporate bond yields for Coreweave (a recent focal point for tech sector contagion potential) also moved slightly lower. On most recent occasions, that would imply upward pressure on mortgage rates. In that light, today's sideways performance was a victory.
It was an uneventful day for mortgage rates, which is just the sort of thing you want to see when the average lender is just a hair above the lowest levels in more than a month. There were no significant economic reports or other market developments that caused any major volatility for rates/bonds. The dominant theme, of late, has been investor rotation out of AI-related assets and into the bond market. Excess demand for bonds is good for rates, all else equal. But there's a nuance. Corporate bonds related to certain tech companies have seen sharply lower demand. That's actually been good for…
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