Good Morning on this best day of the week Wednesday, from your Hometown Lender,

Today is May Day.

April was not good to the bond market. The ten-year treasury which closely correlates to mortgage rates increased 49basis points in April. Fingers crossed; May will be the comeback kid. Yesterday was a loser for almost all asset classes as stocks sold off in an outsized way and bonds followed. Traders consolidated positions ahead of the Fed policy statement/fireside chat after 11 AM Pacific time today.

It’s great to start the month with some real intel on what the month will bring.

The Fed will not cut rates but hopefully will be less hawkish than markets are expecting. The futures market has dialed back expectations on Fed rate cuts to just 1 for the year (a few months ago the expectation was 6+). I am hopeful that Chairman Powell will say something to calm markets that cuts are still in the 2024 playbook.

I would also like to hear him say something about dialing back bond sales.

In theory, either one of these scenarios would help bonds and rates as long as there is no other hawkish commentary. There is still a lot of data left to consume this week. The biggest data set of the month, the BLS jobs report is released Friday with lots of smaller reports between now and then.

It is not recommended to float into any big news event and today’s Fed meeting is about the biggest there is.

Stay safe and make today great!