CHM Blog

This afternoon the FOMC policy statement, Powell’s press conference, the Fed’s forecast on inflation, employment, and economic growth.

Prior to 8:30 am ET the bellwether 10 year note was unchanged from yesterday, at 8:30 am February producer prices (wholesale prices) was reported much higher than estimates putting pressure on interest rates. Month/month PPI expected at +0.3% from +0.5% in January, prices increased 0.7%. Year/year prices increased 3.4% from 2.9% in January. The core (ex food and energy) month/month thought to be +0.3% increased 0.5% but lower than +0.8% in January; year/year core reported +3.9% from 3.6% in January. On a yearly basis, core producer prices climbed by the steepest increase in three years, after a downwardly revised 3.5% in the previous month. The reaction nudged to 10 year up 3 bps and MBS prices -11 bps from yesterday.

There aren’t any thoughts about a rate cut today, this morning’s PPI data adds more angst for the Fed. Inflation not only higher than the Fed wants but is increasing at the wholesale level that will likely be reflected in future CPI data. The Fed navigating increasing inflation while employment is holding ground; the conflict adds more uncertainty. Powell is attending his second to last FOMC as chairman, being replaced in May by Kevin Warsh.

Weekly MBA mortgage applications dropped 10.9% in the week ending March 13, marking the sharpest decline since last September.

Markets will likely sit quietly now until this afternoon when the FOMC will release its policy statement and their projections at 2:30 pm during Powell’s press conference.

PRICES @ 10:00 AM

10 year note: 4.23% +3 bp

5 year note: 3.83% +3 bp

2 year note: 3.73% +4 bp

30 year bond: 4.86% +2 bp

30 year FNMA 5.0: @9:30 am 99.24 -12 bp (-12 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 100.86 -10 bp (-10 bp from 9:30 am yesterday)

30 year GNMA 5.0: @9:30 am 99.40 -18 bp (-15 bp from 9:30 am yesterday)

Dollar/Yen: 159.50 +0.49 yen

Dollar/Euro: $1.1508 -$0.0033

Dollar Index: 99.86 +0.28

Gold: $4,872.30 -$135.90

Bitcoin: 72,340 -2211

Crude Oil: $98.28 +$2.10

DJIA: 46,791 -202

NASDAQ: 22,419 -61

S&P 500: 6694 -22

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.