Good Morning on this best day of the week, Wednesday from your Hometown Lender,
The Fed’s FOMC meeting concludes shortly, and the expectation is that it will pause on a rate cut today.
Markets have already absorbed that and what is more important is what Mr. Powell has to say after the meeting on how he reads the economic tea leaves and what the Fed has planned for the future of rates. The Fed is still the most influential body when it comes to monetary policy but keep in mind, the correlation between Fed action and mortgage rates has waned over the past 6 months. The Fed has cut rates by 100bps and while mortgage rates should have dropped along with the Fed cuts, they have instead risen by 100 basis points (arguably a 200bps decoupling).
The Fed will undoubtedly influence markets but I believe markets are much more focused on President Trump’s policies and how inflationary they will be. On that note, Howard Lutnick who is the Chairman and CEO of one of the largest trading firms and treasury note dealers, and who is up for Commerce Secretary, has been adamant that tariffs will not cause inflation to increase. He’s a smart heavy hitter and knows more than most of us (me especially do).
Here is an interesting piece from Bloomberg…
If there is demand for Treasuries, it will flow through to mortgages which pay a better return.
JPMorgan’s latest client survey shows the biggest net long position in US government debt in almost 15 years. In another sign that long positions are building, open interest in futures — or the amount of new risk held by traders — is increasing in 10-year Treasury contracts.

Policy makers are likely to keep rates steady, given the sturdy US economy and worries over sticky inflation. DoubleLine Capital’s Jeffrey Gundlach described today’s decision as the most predictable “no change” in recent years.
The Fed has cut at three straight meetings since September, lowering the benchmark rate by a full percentage point. Their target range is now 4.25% to 4.5%.
More tomorrow on the Fed.
Stay safe and make today great!!!