CHM Blog

This morning the 10 year note yield began 5 bps lower to 4.21%, MBSs in early activity +14 bps from yesterday. There are no economic releases today, next week the calendar is full.

It is clear now, for the moment anyway, the Fed has three rate cuts penciled in this year and Powell made a point that he sees no rate increases due to excessive inflation. I say for the moment because interest rates have mostly discounted rate cuts at current levels, if next Friday’s February PCE inflation increases no one will remember Powell’s pronouncements. Inflation is still a moving target.

European Central Bank President Christine Lagarde told euro-area leaders at a summit in Brussels that easing in euro-area inflation is expected to persist, thanks to the effectiveness of monetary policy. This week most all central banks joined the view that inflation will slow and most talk about rate cuts coming.

At 9:30 am the DJIA opened quietly, the DJIA +11, NASDAQ -17, S&P +1. 10 year at 9:30 am 4.21% -6 bps, FNMA 6.0 30 year coupon at 9:30 am +15 bps from yesterday’s close and +12 bps from 9:30 am yesterday.

Overlooked this week. The potential government shutdown unless the House votes on a $1.2 trillion spending bill. No sweat, it will get passed. The action is expected to go down to the wire, with a short partial shutdown furloughing some government workers possible if Congress doesn’t send the bill to President Biden’s desk in time. A weekend shutdown would mark the first lapse in appropriations since 2019. Rating agencies have lowered the US rate from AAA to AA+.

PRICES @ 10:00 AM

10 year note: 4.21% -5 bp

5 year note: 4.20% -6 bp

2 year note: 4.60% -4 bp

30 year bond: 4.39% -5 bp

30 year FNMA 6.0: @9:30 am 100.95 +15 bp (+13 bp from 9:30 am yesterday)

30 year FNMA 6.5: @9:30 am 102.19 +13 bp (+7 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 99.84 +20 bp (+14 bp from 9:30 am yesterday)

Dollar/Yuan: $7.2295 +$0.0299

Dollar/Yen: 151.10 -0.53 yen

Dollar/Euro: $1.0826 -$0.0035

Dollar Index: 104.25 +0.82

Gold: $2,176.90 -$7.80

Bitcoin: 63,287 -2033

Crude Oil: $81.030 -$0.04

DJIA: 39,737 -44

NASDAQ: 16,395 -7

S&P 500: 5240 -1

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

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MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.