There’s really not much action taking place in the markets today as investors eagerly wait to hear from the Federal Reserve, which is concluding its two-day FOMC meeting this afternoon. What unfolds later today could cause rates to adjust, so it’s important to tune in and catch the news. Read on for more details.
Where are mortgage rates going?
Rates in holding pattern ahead of Fed announcement
The Federal Reserve’s Federal Open Market Committee (FOMC) wraps up their sixth meeting of the year today with a written statement at 2:00pm followed by a Janet Yellen press conference at 2:30pm.
Click here to get today’s latest mortgage rates (Sep. 20, 2017).
No one is expecting the Fed to make any adjustments to the federal funds rate, which currently sits at 1.00%-1.25%, but that doesn’t mean there’s no significance to today’s meeting.
The two big things to watch for today are
- The type of language the Fed uses to describe the economy and what that means for a December rate hike.
- The details on the Fed’s balance sheet reduction.
While the odds of a quarter point rate increase in December have remained under 50% (according to the CME Group’s Fed Funds futures) for several months now, there’s always the chance that Fed officials will come out and say something to stoke investor optimism and bring those odds up. At this point, it’s not a scenario that you would want to bet the house on, but it’s not entirely out of the question.
The key here will be in how the Fed outlook on the economy has changed from the prior statement. Inflation has been the key economic factor keeping the Fed from pulling the trigger, so it will be particularly important for investors to get the Fed’s latest thinking on that issue.
Many analysts and economists have been stirring up the notion that if there are any signs of an uptick in inflation between now and December, the Fed will follow through with a rate increase.
With regards to the Fed’s $4.5 trillion portfolio, the widespread belief is that they will begin the taper today. Despite the looming exit of the largest bond-purchaser of the market, treasury yields are still down at some of the lowest levels of the year. It will be interesting to see what the market reaction once the plan is formally put into place.
Currently, the Fed is the largest purchaser of mortgage-backed securities, with a little less than $2 trillion in holdings. Without the Fed buying up all of these assets, lenders will have less liquidity to work with, potentially creating a slowdown. All of this could put upward pressure on mortgage rates over the next few weeks, but there are no givens on what will actually unfold.
That’s why it’s important to tune in to the press conference (or at least read about it after the fact). That’s where most of the details will be discussed as journalists grill Fed chair Yellen about the written statement and other issues at hand.
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What does this mean for me?
Mortgage rates at low levels for 2017
Mortgage rates haven’t moved much this week, which is good news for anyone looking to purchase a home or refinance their current mortgage. We could get an adjustment once the written statement gets released and Janet Yellen is done speaking, so anyone thinking of taking action soon should definitely pay attention to where things are going this afternoon.
To get the most accurate idea of what kind of rate we could offer, you should fill out our short form and get a personalized rate quote. Or, if you’d rather talk to someone, you can always call one of our experienced mortgage specialists.
They can walk you through the same process, clarifying any questions you may have, and let you know what your custom rate quote is.
Today’s economic data:
Existing Home Sales
Existing home sales came in at an annualized rate of 5.350 M for August.
EIA Petroleum Status Report
For the week of 9/15/17:
- Crude oil: 4.6 M barrels
- Gasoline: -2.1 M barrels
- Distillates: -5.7 M barrels
FOMC Meeting Announcement
- The written statement will be released at 2:00pm, followed by a press-conference with Fed chair Janet Yellen.
Notable events this week:
Monday:
- Housing Market Index
Tuesday:
- FOMC Meeting Begins
- Housing Starts
- Import and Export Prices
- President Trump Speaks to the United Nations
Wednesday:
- Existing Home Sales
- EIA Petroleum Status Report
- FOMC Meeting Announcement
Thursday:
- Jobless Claims
- Philly Fed Business Outlook Survey
- FHFA House Price Index
Friday:
- Fedspeak
- PMI Composite Flash
from Total Mortgage Underwritings Blog http://ift.tt/2xn87hU
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