fed

Fed delivers a 25 bps rate hike amid bank failures 

The Fed has decided to forge ahead in its fight against inflation, despite several bank closures that have caused turbulence in the financial markets.

Mortgage Rates May Drop Despite Fed Rate Increase

A toned-down Fed rate increase and a stampede into bonds could lead to lower mortgage rates.

Simple, Boring, Half Point Sell-Off in MBS

Absence of Data Leaves Even More Focus on The Fed If there happened to be some significant economic data today, or on the next two mornings, financial markets might wait to see what it implied before diving head-first into the pastime of overanalyzing Fed rate hike odds.  With essentially no relevant data between now and then, the task at hand is clear: get in position for the Fed (if you’re not already) and react to any major developments in the banking sector.  Monday’s early trading suggests markets are actually right about where they want to be after a bit of overnight volatility surrounding the UBS takeover of Credit Suisse. Econ Data / Events No significant econ data Market Movement Recap 09:16 AM 10s are currently down 2.6bps at 3.412.  MBS are unchanged (5.0 coupons).  11:27 AM More legitimate weakness after an early bout of illiquidity.  MBD down 3/8ths with at least a quarter point of losses vs AM highs.  10yr yields are up 3.2bps at 3.47. 02:13 PM Weakest levels of the day with MBS down just over half a point and 10yr yields up 5.4bps at 3.492.  Stocks are up about 2/3rds of a percent.

Stocks and Bond Yields Moving Higher Together; Fed on Deck

Stocks and Bond Yields Moving Higher Together; Fed on Deck Today’s trading session turned out to be every bit as simple as it seemed like it would be this morning.  Why so simple?  There were clear indications that improved sentiment in the banking sector was fueling a ‘risk-on’ trading pattern in Europe (i.e. stock prices and bond yields moving higher together). This extended to US markets, but especially to Treasuries.  MBS actually outperformed, which isn’t too shocking considering Treasuries were the star performers when the market was trading in a risk-off direction. Econ Data / Events Existing Home Sales 4.58m vs 4.20m f’cast, 4.0m prev Market Movement Recap 08:58 AM Weaker overnight. Europe trades risk-on.  10yr up 10+ bps at 3.587.  MBS down 3/8ths.  10:41 AM Moderate improvement since 9am, but still weaker on the day.  MBS down less than a quarter point.  10yr up 8bps at 3.562. 01:40 PM Respectable 20yr bond auction without any major reaction in the bond market.  10yr up 10bps at 3.583 and MBS down just over a quarter point. 03:45 PM Stocks at highs. 10yr yields up 12.3bps at 3.606, near highs.  MBS outperforming despite a brief scare due to illiquidity.  Still down just over a quarter point.

Mortgage Rates and Payments Keep Rising, Creating Market Misery – Kiplinger’s Personal Finance

Mortgage Rates and Payments Keep Rising, Creating Market Misery  Kiplinger’s Personal Finance

How far the Fed’s facility is likely to go in stopping bank MBS woes

The effectiveness of the borrowing facility now available to address the mortgage-backed securities risk that contributed to Silicon Valley Bank’s failure remains to be seen, as it has been tapped for at least $12 billion but institutions are leaning more heavily on other funding sources. But experts are hopeful about its usage. “I think that … [Read more…]

Broker, Efficiency Products; FHA, VA, USDA News; Bank Failures Explained

It hasn’t been a good few weeks for banks whose names begin with “Si” (Silvergate, Silicon Valley, and Signature, with Silicon Valley Bank declaring Chapter 11 bankruptcy this morning; today’s Rundown discusses how the bank crisis may impact lenders). Ah, those clever secondary marketing folks. Cornerstone’s Henry S. frets, “I can’t believe it’s bank collapse season already. I just finished taking down my train derailment decorations.” Certainly, time flies by, and I hope you’re wearing some green today. Originally a religious holiday to honor St. Patrick, who introduced Christianity to Ireland in the 5th century, St. Patrick’s Day has evolved into a celebration of all things Irish, with the first parade on March 17, 1762, in New York City, featuring Irish soldiers who served in the English military. It certainly is more fun to think about celebrating the Irish than the constant stream of headlines as people race to conjecture about the health of world banking, and people crying “shoulda woulda coulda.” The markets seem to be performing a stress test on the Fed. The Federal Reserve’s (Fed’s) tightening seems to be finally having an effect, and an early victim has been smaller banks that did a poor job of managing interest rate and deposit concentration risk. (Today’s podcast can be found here and this week is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology, and other services in the mortgage industry and in banking.)

Flagstar acquires $38B in assets, assumes $34B deposits from Signature

Flagstar Bank, a top-20 mortgage lender, has assumed most Signature deposits and acquired certain assets, business lines and liabilities. 

Silicon Valley Bank Collapse — Second Largest All-Time Failure

Silicon Valley Bank collapses in the second largest US bank failure of all time. Regulators seize assets and transfer them to the FDIC, which guaranteesdeposits.