December 12th, 2016
The Federal Open Market Committee (FOMC) is the branch of the Federal Reserve Board that determines the direction of monetary policy. The FOMC is composed of the board of governors, which has seven members, and five Reserve Bank presidents. The president of the Federal Reserve Bank of New York serves continuously, while the presidents of the other Reserve Banks rotate their service of one-year terms.
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97% of a Fed Hike on Wednesday http://finance.yahoo.com/news/fed-turns-trump-agenda-rate-061544798.html
WRAP: MBS opened lower, but were able to trade to unchanged levels or better as bargain hunters scooped up bargain basement prices. There were no economic reports released today. Bond prices were weighed down by rising oil prices and added supply from the Treasury. The 30-yr Fannie Mae 30 coupon closed near unchanged at 102.16 after hitting 101.84 earlier in the session. Stocks ended mixed but the Dow closed in record territory at 19,796.43, +39.58 points. The S&P fell 2.57 points to 2,256.96, while the Nasdaq was down 31.96 points to end at 5,412.54. WTI oil closed at $52.83/barrel, +$1.33. 10-yr T Note yield 2.47% after hitting 2.52% earlier in the trading day. There are no economic reports due out tomorrow. The Treasury will sell $12B 30-yr Bonds. The 2-day Fed meeting kicks off tomorrow, but there will be no headlines until Wednesday at 2:00 p.m. ET when the monetary policy statement is released. There is nearly a 100% chance that the short-term Fed Funds Rate will increase by 0.25% when the statement is released.
What Is Going On With Interest Rates? #wigowir
Below is the news when it happened and the market’s reaction. For a full view of the day start at the bottom and work your way up. If want to know what just happened start at the top. All Times are Eastern Standard Time. When the price of Mortgage Backed Securities (MBS) goes down rates go up, and when the price goes up rates come down. Remember in the bond market Bad News is Good News and Good News is Bad news.
4:02 PM The Dow notches 15th record close since the election ... 19,796.
1:27 PM MBS able to trade back to session highs, now near unchanged.
1:13 PM The $20B 10-yr offering garners a "C-" rating.
12:55 PM At midday, MBS modestly lower, Stocks mixed. 10-yr yield 2.47%.
The bonds are trying to stay above $102.
11:52 AM The $24B 3-yr Note auction garners a "C" rating.
11:03 AM The S&P and Nasdaq are in negative territory, Dow holding gains. MBS lower. 10-yr yield 2.49%.
10:25 AM The S&P slips into negative territory.
9:38 AM Stocks open mixed. Dow slightly higher, S&P near unchanged.
9:14 AM Homes with negative equity decrease more than 10%, reports CoreLogic.
8:37 AM S&P futures near unchanged after the Dow (19,756), S&P (2,259) and the Nasdaq (5,444) all closed at record highs on Friday.
8:31 AM MBS able to bounce higher from the opening lows.
8:21 AM S&P futures unchanged.
8:19 AM President-elect Donald Trump taps ExxonMobil CEO Rex Tillerson for Secretary of State.
8:18 AM The 3.5% Fannie Mae 30-yr coupon falls below support at multi-year lows.
8:16 AM The Treasury will be selling $24B 3-year Notes today, results at 11:30 a.m. ET and will also sell $20B 10-yr Notes, results at 1:00 p.m. ET.
8:15 AM There are no economic reports due for release today.
8:14 AM Fed Chair Yellen will hold a press conference at 2:30 p.m. ET on Wednesday.
8:13 AM It is expected that the Fed will raise the short-term Fed Funds Rate will rise by 0.25%.
8:12 AM U.S. dollar index 101.38, -0.24.
8:12 AM The Fed members kick off the final FOMC meeting for 2016 tomorrow and will end Wednesday with the 2:00 p.m. ET release of its monetary policy statement.
8:11 AM 10-yr T Note yield 2.50%.
8:10 AM MBS open lower following the lead from Treasury securities as they move lower on the oil news.
8:04 AM Oil prices gush higher after non-OPEC producers agreed to additional cuts. WTI oil $53.93, +$2.42 and is pressuring Treasury yields higher.
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