8:15 a.m. Today around 11:00 am PST, we’ll have the decision from the FOMC on whether they are making any adjustments to the federal funds interest rate. Odds are very strong (99.5% per the CME Group) that there will be no change at this meeting. This is what the markets are anticipating. If the Fed surprises us, then markets will react dramatically. The Fed’s actions and market reactions are what may impact mortgage rates today as mortgage rates are based on bonds (mortgage-backed securities). The Fed does not directly control mortgage interest rates.
Following the Fed announcement today, Fed Chair Powell will hold a press conference. What he says (or what the market interprets from his press conference) may also impact the direction of mortgage interest rates. The markets are watching for signs that inflation is cooling (good for mortgage rates) or if inflation is being stubborn (bad for mortgage rates).
Right now, MBS 30 year is pretty flat (down 4 basis points).
11:08 a.m. No surprises here. The Fed left the funds rate unchanged. Stay tuned! I will continue to update this post throughout the day! MBS remains pretty flat and is currently down 6 basis points.
Next up is the press conference.
Update 11:37 a.m. Powell states that President Trump has not directly contacted him with regards of reducing rates, responding to a question from Steve Gleason.
A lot of questions are being asked about how the Fed will be able to continue to operate independently under the current administration.
On tariffs, Fed Chair Powell says there are a lot of unknowns and variables as far as knowing how it may impact consumers and/or translate to inflation. “We have to wait and see how it goes”.
Update 2:05 p.m. Bond market closed up 5 basis points. Mortgage rates were unchanged today from when I started this post.
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