Good Wednesday AM on this best day of the week.

Today is FOMC day when the Fed offers their insight on the economy and monetary policy. The statement came out about 30 mins ago. The Fed will allow inflation to exceed 2% (if/when it finally hits 2%) and anticipates it will keep rates close to zero until the end of 2023… Wow!!! Rates to stay low for another 3 yrs folks. What can we buy with all this free money? That’s the goal here. Go and buy anything and everything so businesses need to build and hire and create jobs. Retail sales numbers were weak today which is not supportive of the rebound. Bonds should be benefiting from the dovish news but money is flowing out and into equities. The Dow is up almost 300. The 10-yr has bumped to .70 and mortgage bonds are -16bps. I think bonds come back in a bit but it is always a longer road to improvement than it is to the downside.

If you want to know why rates are not lower and why refinances are taking longer, the graph below is a great answer.

Mortgage Securities Are Flooding the Market. Thank the Fed.

How strong was the expansion? This is great insight.. U.S. incomes hit their highest level in half a century last year: Americans’ earnings rose sharply and poverty fell in the final year of the country’s decadelong economic expansion, according to fresh Census Bureau data. The figures show incomes improved during most of the last five years before the pandemic drove the U.S. into a recession in February. When adjusted for inflation, incomes last year hit their highest level since the bureau began measuring them this way in 1967.

Please remain safe and healthy, make today great.