It’s Bill Rapp, the Mortgage Viking here, let me tell you about what the Good Ole Boys on Wall Street are talking about today…
Rates are slightly lower across the curve, continuing yesterday’s bond market rally although there was no real news overnight to trade on. Tomorrow will give the Treasury market plenty to trade on with the year’s first FOMC meeting and subsequent Jerome Powell press conference, as well as the resumption of the U.S. & China trade negotiations.
More market moving news will come from the FOMC meeting. After all the recent dovish “Fedspeak” post December meeting, the Fed is widely expected to hold rates at this meeting and given they don’t updated the economic projections until March.
Former Fed Chair Ben Bernanke has continued to stress that it isn’t necessarily the sizes of the Fed’s holdings of Treasuries, but rather the duration of the Fed’s Treasury holdings vs. the market that influence monetary policy.
Expect the meeting statement to reflect a shift toward a more cautious/data dependent approach to further hikes and we think this narrative eventually also permeates to the dot plot, where the median estimate is still for 2 hikes in 2019.
That is all for today, please do not forget to subscribe and share this post if you found it useful!
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