CHM Blog

Over night the 10 traded down 2 bps, by 8:30 am ET this morning +3 bps from yesterday’s close. Rates ended yesterday essentially unchanged after the knee jerk reaction yesterday morning to Moody’s cutting the US debt rating. Once traders realized the debt rating was in line what other rating agencies had done over a year ago the initial reaction was quickly erased. There was no economic data yesterday of import. It is the same today, no economic data.

The constant debate over when, or if, the Fed may cut rates is never-ending. The guessing continues; two Federal Reserve officials, including New York Fed chief John Williams, suggested policymakers may not be ready to lower rates before September as they confront a murky economic outlook. As for a possible cut at the June FOMC meeting (17th and 18th) that is very unlikely. The Fed like everyone else trying to assess the impact of the tariffs on inflation. Fed officials, including Williams, Atlanta Fed President Raphael Bostic, and others, are adopting a wait-and-see approach, citing uncertainty and the need to collect more data before making any decisions on rates.

Federal Reserve Vice Chair Philip Jefferson saying the central bank must ensure that price increases from policy changes in Washington don't lead to a persistent rise in inflation. He wants a patient approach. Federal Reserve Bank of Dallas President Lorie Logan is calling for banks to use the discount window and centrally clearing Standing Repo Facility operations, and notes that the Fed should pay attention to a wide array of market interest rates.

Former Federal Reserve Chair Ben Bernanke suggested the central bank should provide more information about its policy; a fuller explanation of its interest-rate decisions and a much richer examination of potential forecast scenarios. “The publication of selected alternative scenarios and their implications could facilitate a subtle but important shift in the Fed’s communications strategy,” Bernanke criticized the Fed for providing relatively little context and explanation following its rate decisions.

At 9:30 am the DJIA opened -17, NASDAQ -80, S&P -17. 10 year at 9:30 am 4.50% +4 bps. FNMA 6.0 30 year coupon at 9:30 am -12 bps from yesterday’s close and +19 bps from 9:30 am yesterday. (Yesterday afternoon MBS prices rallied)

PRICES @ 10:00 AM

10 year note: 4.52% +6 bp

5 year note: 4.10% +4 bp

2 year note: 4.00% +2 bp

30 year bond: 4.99% +8 bp

30 year FNMA 6.0: @9:30 am 100.65 -12 bp (+19 bp from 9:30 am yesterday)

30 year FNMA 6.5: @9:30 am 102.48 -4 bp (+17 bp from 9:30 am yesterday)

30 year GNMA 6.0: @9:30 am 100.51 -10 bp (+6 bp from 9:30 am yesterday)

Dollar/Yen: 144.96 +0.10 yen

Dollar/Euro: $1.1240 -$0.0004

Dollar Index: 100.41 -0.01

Gold: $3,244.30 +$10.80

Bitcoin: 104,267 -1308

Crude Oil: $62.25 -$0.44

DJIA: 42,713 -70

NASDAQ: 19,104 -112

S&P 500: 5943 -20

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.