Good Tuesday AM from your Hometown Lender,
Markets seem to have finally calmed down from last Friday’s jobs report.
The 10-yr has improved back to 4.08% this morning and mortgage bonds are up about 20bps which claws back most of yesterday’s losses. There is no important economic data today. There will be some Fedspeak shortly with three Fed Governors (unfortunately hawkish ones) taking separate podiums in a little bit. I expect them to all talk about keeping rates at the current level until they have more evidence of inflation retreating.
The positive outlook on today’s Fedspeak is as markets are already expecting the negative rhetoric, anything less negative will be heard as a positive and help rates. While the current odds of a rate cut in March for the moment, continue to drop, expectations are still high for May and beyond. We don’t have much economic data through the rest of the week so any Fedspeak will dominate the headlines.
I don’t think we will see much more leakage and actually see rates improving a bit as the Fed has made it clear there will be no more rate hikes. The question remains when will they cut and to me more importantly, when they will slow down the sale of their bond holdings.
Please remain safe and healthy, make today great!