fed

Bonds Manage to Hold Gains Despite Risk Recovery

Bonds Manage to Hold Gains Despite Risk Recovery Everything has been driven by the “risk-on, risk-off” movements relating to the banking sector over the past 2 weeks.  The only brief exception was on Fed day, but markets still managed to fall into a flight-to-safety pattern by the end of that day.  Another flight-to-safety showed up overnight–this time driven by Deutsche Bank.  EU bonds led US bond yields lower, but the momentum reversed course before 7am ET.  The rest of the day saw stocks and EU bonds trudge back toward or above yesterday’s levels.  US bonds managed to hold some of the gains with 3.382 emerging as a good pivot point for 10yr yields.   Econ Data / Events Durable Goods -1.0 vs 0.6 f’cast, -5.0 prev Durables, excluding aircraft/defense 0.2 vs 0.0 f’cast, last month revised to 0.3 from 0.8 Markit Services PMI 53.8 vs 50.5 f’cast, 50.6 prev Market Movement Recap 09:15 AM 10yr down 11.2bps at 3.302.  MBS up more than a quarter point on Deutsche Bank concerns.  10:00 AM Losing ground after PMI data and a correction in EU bonds.  10yr down 5.6bps at 3.359.  MBS down an eighth on the day and a quarter point from AM highs. 11:18 AM Recovering a bit.  MBS back near unchanged levels.  10yr down 6bps at 3.356. 02:50 PM MBS still near unchanged levels.  10yr now down only 4.5bps at 3.369

Bank borrowing from Fed facilities stabilizes

Bank borrowing from the Federal Reserve’s discount window and newly established “super discount window” — as well as advances from the Federal Home Loan Bank System — have stabilized over the course of the week, indicating to some observers that the liquidity crunch that befell Silvergate Bank, Silicon Valley Bank and Signature Bank seems to … [Read more…]

Mortgage Rates Inch Down to Lowest Levels Since Early February

Over the course of the past two days, the average conforming 30yr fixed rate has moved down to the lowest levels since early February for most lenders.  In nuts and bolts terms, that’s a drop of more than half a percent. Yesterday accounted for a much larger portion of the improvement as lenders continued updating their offerings in response to Wednesday afternoon’s bond market movement (courtesy of the Fed).  Bonds ultimately improved today due to a flight to safety in the broader market.  In other words, investors sold riskier assets like stocks and bought safer assets like bonds.  Excess bond buying results in lower rates, all other things being equal.  Could the improvements continue?  That depends what you’re willing to sacrifice for them.  In the current case, the price of lower rates would likely be more bad news for the banking system.  While nothing catastrophic happened on that front today, the market remains a bit nervous about the prospect of more unexpected drama.  

Current national mortgage and refinance rates, March 24, 2023 … – Bankrate.com

Current national mortgage and refinance rates, March 24, 2023 …  Bankrate.com

Is a House an Investment?

It can be a complicated decision to determine if you should rent or buy a home. And if you’re leaning toward buying, high housing prices and high mortgage rates are likely making that decision even more difficult. Current economic conditions … Continue reading →

The post Is a House an Investment? appeared first on SmartAsset Blog.

Now It’s a Waiting Game

The Fed cleared a lot up for the market yesterday by confirming that inflation still matters, but that systemic banking problems also matter.  Powell pointed to the latter being like a free rate hike–i.e. something that helps deliver a tightening effect to the economy without the Fed actually having to hike rates. Markets took it as a potential turning point for rate hike urgency.  Unfortunately, the existence of that turning point depends on the persistence of banking concerns.  Assessing that persistence not only requires time, but also has no definite, positive, watershed moment.  By alerting the world to the tightening possibilities from bank issues, the Fed went a long way toward confirming that we can do our watching and waiting from lower rate levels than those seen in early March.  The current range will likely prove to be too low if we don’t get additional evidence of bank stress or economic fallout, but for now, it’s centered on 3.50% in 10yr yields and on an end-of-year Fed Funds Rate range of 4.0 – 4.25% (expressed as 4.125% in the chart).