CHM Blog

This morning the 10 year note pushed to 4.52%, + 8 bps from Friday. MBS prices began the day -10 bps.

Nothing on the calendar today but there is another major inflation release on Friday and two measures for consumers, the Conference Board’s consumer confidence index and the University of Michigan consumer sentiment index, new home sales and pending home sales later this week.

Last week’s FOMC meeting made it clear rates are going to stay higher longer than had been thought. There was plenty of speculation prior to the meeting about higher for longer but until the Fed put its imprimatur on it, rates had held steady for the prior week.

At 9:30 am the DJIA opened -78, NASDAQ -62, S&P -14. 10 year 4.53%. FNMA 6.0 30 year coupon -32 bps from Friday’s close and -17 bps from 9:30 am Friday. The 10 is now the highest going back to 2007 just prior to the global financial crash in 2008.

Mr. Powell continues to favor ignoring food and energy when viewing inflation, that doesn’t float anymore. The recent increase in energy prices continues to feed through the system and keep inflation from declining. The labor market is staying firm, defying the Fed’s idea that energy prices are transitory. That may be the case although defining transitory is an uncertain outlook. Fed Bank of Chicago head Austan Goolsbee said it’s still possible for the US to avoid a recession. “I’ve been calling that the golden path and I think it’s possible, but there are a lot of risks and the path is long and winding,” he said in a CNBC interview. Boston Fed President Susan Collins said further tightening “is certainly not off the table,” Governor Michelle Bowman signaled that more than one increase will probably be required. Wages are going to be difficult to control after the UAW strike is settled with higher wages.

The debt ceiling set to expire at the end of the week, probably be extended, US debt is going to total $1.3 trillion this fiscal year for a grand total of $3.1 trillion.

PRICES @ 10:00 AM

10 year note: 4.52% +8 bp

5 year note: 4.61% +3 bp

2 year note: 5.12% +2 bp

30 year bond: 4.63% +10 bp

30 year FNMA 6.0: @9:30 am 99.03 -32 bp (-17 bp from 9:30 am Friday)

30 year FNMA 5.5: @9:30 am 97.09 -45 bp (-27 bp from 9:30 am Friday)

30 year GNMA 5.5: @9:30 am 97.90 +1 bp (+18 bp from 9:30 am Friday)

Dollar/Yuan: $7.3108 +$0.0128

Dollar/Yen: 141.82 +0.51

Dollar/Euro: $1.0601 -$0.0044

Dollar Index: 105.89 +0.31

Gold: $1945.70 -0.10

Bitcoin: 26,150 -370

Crude Oil: $89.88 -$0.15

DJIA: 33,889 -83

NASDAQ: 13,200 -12

S&P 500: 4315 -5

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.

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

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