August 26th, 2016
What Is Going On With Interest Rates? #wigowir
When the price of Mortgage Backed Securities (MBS) on the Chart above goes down rates go up, and when the price goes up rates come down. Chart was posted at: 10:24 am. All times are Eastern Standard.
At the close Fed Chair Janet Yellen spoke today, but she didn’t say anything that shook the markets though Mortgage Bond prices quickly fell, but reversed to session highs. However, Fed Vice Chair Stanley Fischer made some hawkish comments and said there could be 2 hikes this year and that September could be one of them. Mortgage Bond prices fell after Fischer's comments. The 3% Fannie Mae 30-yr coupon closed at 103.47, -19bp and well below the pricing windows and 41bp below the session high. Stocks also reversed and fell into negative territory after Fischer’s words. The Dow lost 53.01 points to 18,395.40, the S&P lost 3.43 points to 2,169.04, while the Nasdaq was up 6.71 points to end the week at 5,218.91. WTI oil closed at $47.60/barrel, +$0.27. 10-yr T Note yield 1.62%. Next week’s packed economic calendar includes consumer spending, inflation data, consumer confidence, housing, manufacturing and last but not least, ADP Private Payrolls and the government’s Jobs Report for August. Have a great weekend!
10:24 am Yellen makes the case for raising U.S. interest rates because of improvements in the job market. She just did not let us know when. She also stated that the increases will be gradual. For more information: http://finance.yahoo.com/news/feds-yellen-says-case-interest-140001844.html
The 3% MBS is currently up 16 ticks from Thursday’s close at 103.84 above the 25 day moving average (Green Line) of $103.70. The Rate below are unchanged from yesterday.
9:27 AM ET New Rates have been posted
30-Year Fixed 3.375% (3.457% APR) No Origination Fee
15-Year Fixed 2.750% (2.892% APR) No Origination Fee
7-1 ARM 30 year 3.000% (3.341% APR) No Origination Fee
For more rates and details click: http://www.johnmarbury.com/page5.html/
Feel free to call (205-266-5669) or email (email@example.com) John for a quote based on the terms of you loan.
3:12 PM - Fed Fund Futures show a 38% chance of a hike to the short-term Fed Funds Rate in September.
2:48 PM 3%MBS now down 22 ticks, at $103.47. We are now trading below the 25 and 50 day moving average.
1:35 PM - Alert To Lock!
1:15 PM - As long as the 50-day Moving Average of support holds for the 3% Fannie Mae 30-yr coupon, we will continue to float.
1:02 PM - Markets spooked after Fed's Fischer said there could be 2 rate hikes this year and that September could see a hike.
12:46 PM - In May, cash sales made up 30% of total home sales, which is down 2.5 percentage points from May 2015.
12:27 PM - MBS drifting lower after comments from Fed's Fischer. The 3% Fannie Mae 30-yr sitting on support at the 50-day Moving Average.
12:18 PM - Dow was up over 100 points, now -80 points after the Fed's Fischer had some hawkish comments.
11:56 AM - MBS off highs.
11:51 AM - The Dow turns negative after some rather hawkish comments from the Fed's Stanley Fischer.
11:40 AM - Fed's Fischer says number of rate hikes this year depends on the data.
11:08 AM - Yellen also said that the economic outlook is uncertain.
The 3% Fannie Mae 30-yr coupon hits session highs.
10:55 AM - The dollar rose after Yellen's remarks thinking a rate hike was near, but has since given up the gains.
The 10-yr T Note yield did rise to 1.60% as Ms. Yellen's comments hit the wires, but has since moved back down to 1.54%.
10:35 AM - The final reading on August Consumer Sentiment 89.8 vs the 90.6 expected.
Ms. Yellen did say that a rate hike will still be data dependent.
10:23 AM - WTI oil higher by $1 to $48.35/barrel.
MBS now pushing higher into positive territory.
10:22 AM - 10-yr T Note edges lower to 1.53%.
10:16 AM - MBS trade back to pre-Yellen levels. Stocks add to gains.
10:08 AM - Yellen says the Fed has tools to fight the next recession.
Yellen says economic growth sufficient to improve labor markets.
Yellen says the Fed may want to broaden asset purchases.
Yellen says the case for a rate hike has strengthened in recent months.
Yellen says anticipate gradual rate hikes over time.
8:34 AM - No reaction from the inline GDP data as markets look ahead to Yellen's speech.
Q2 second read GDP 1.1%, inline.
8:28 AM - U.S. dollar index 94.58, -0.15.
2nd reading on Q2 GDP will be released at 8:30 a.m. ET. Consumer Sentiment at 10.
St. Louis Fed President Bullard said this morning the Fed could raise rates in 2016.
Ms. Yellen is scheduled to speak at 10:00 a.m. ET.
WTI oil at $47.30/barrel, unchanged.
10-yr T Note yield at 1.56%.
MBS open near unchanged ahead of Fed Chair Yellen's speech at the Jackson Hole, Wyoming economic symposium.