CHM Blog

The stock indexes improved in futures markets early this morning, the 10 year note began the day at 3.69% +4 bps. MBS prices at 8:30 am ET -12 bps from yesterday. NY Fed Williams saying the new Fed model shows lower economic growth compared to the prior model and low rates may continue.

Both political parties are talking progress in working out an acceptable deal on the debt ceiling. In Japan Biden keeping an eye on the discussions between key staffers that are working on it. House speaker McCarthy and Senate majority leader Schumer say they will have a vote on a deal next week. Biden will be back Sunday or Monday.

There are no economic reports today. The main feature is a panel discussion that includes Jerome Powell and Ben Bernanke at the Thomas Laubach Research Conference. This year's conference will highlight key issues in monetary policy and the economy and facilitate discussions on the challenges faced by monetary policymakers; speakers include Chair Powell; former Federal Reserve Chair and winner of the 2022 Nobel Memorial Prize in Economic Sciences, Ben S. Bernanke; and President and CEO of the Federal Reserve Bank of New York, John C. Williams. The conference is expected to begin at 11 am; any movements today in stocks or interest rates will likely be driven by comments from the conference.

The economic data recently showing strong consumer spending, low unemployment and inflation slowing but at a pace that may be too slow for the Federal Reserve. The 10 improved and rates declined on the bank failures three weeks ago, now that the banking sector appears to be out of the woods traders and money managers turning to believe the Fed will increase the FF rate again on June 14th. A week or two ago it was the wide belief the Fed would pause its increases and by the end of the year begin to lower rates. In rate futures investors now believe a lower probability that the Fed will cut rates later this year—a sign that they believe a recession is less likely. Also supporting the recent decline in rates, the debt ceiling concerns, that is over; the debt ceiling will be resolved.

At 9:30 am the DJIA opened +35, NASDAQ +24, S&P +8. 10 year at 9:30 am 3.70% +5 bps. At 9:45 am the FNMA 6.0 30 year coupon -23 bps and -28 bps from 9:30 am yesterday; the 5.5 coupon -28 bps and -37 bp from 9:30 am yesterday.

Any important change today will come from the conference that includes Powell and Bernanke scheduled to begin at 11 am.

PRICES @ 10:00 AM

10 year note: 3.71% +6 bp

5 year note: 3.77% +8 bp

2 year note: 4.32% +6 bp

30 year bond: 3.95% +4 bp

Libor Rates: 1 month 5.148%; 3 m o 5.379%; 6 month 5.425%; 1 year 5.392% (5/18/23)

30 year FNMA 6.0: @9:30 am 101.17 -23 bp (-28 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 99.86 -28 bp (-37 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 99.81 -25 bp (-33 bp from 9:30 am yesterday)

Dollar/Yuan: $7.0121 -$0.0238

Dollar/Yen: 138.57 -0.14 yen

Dollar/Euro: $1.0795 +$0.0024

Dollar Index: 103.35 -0.23

Gold: $1961.90 +$21.0

Bitcoin: 26,881 +140

Crude Oil: $72.32 +$0.45

DJIA: 33,586 +50

NASDAQ: 12,6.93 +4

S&P 500: 4207 +9

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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