Wednesday’s bond market has opened in positive territory as investors prepare for today’s Federal Reserve dominated schedule. Stocks are helping to boost bonds with noticeable losses during trading. The Dow is currently down 70 points while the Nasdaq has fallen 10 points. The bond market is currently up 6/32 (2.03%), which should slightly improve this morning’s mortgage pricing. However, most lenders are waiting for this afternoon’s schedule to play out before making a revision in rates.
There is no relevant economic data set for release today. The markets are focused almost exclusively on today’s Fed events. Today’s FOMC schedule starts with the 2:00 PM ET adjournment of their two-day meeting that started yesterday. It is widely expected that they will not change key short-term interest rates at this meeting, although market participants will be watching the post-meeting statement closely for changes in verbiage that could indicate when their first move will take place. Any surprises on this could heavily influence the markets and mortgage rates this afternoon.
Also at 2:00 PM, the Fed will release its revised economic forecasts and projections. The most important pieces of that are their employment and inflation forecasts as those benchmarks will be crucial in determining when the Fed makes their first increase to key short-term interest rates. That will be followed by a press conference with Chairperson Janet Yellen that could bring another round of volatility in the markets, depending on what questions and answers are presented.
I am expecting a very active afternoon in the financial and mortgage markets today. We will update this report during late afternoon hours, allowing the markets to make a knee-jerk reaction to the different events before stabilizing to reflect the true impact they will have on mortgage rates. There are a couple of minor economic reports set for release tomorrow morning that will be addressed in today’s afternoon revision.