Cautiously floating

There were quite a few economic reports today.  Durable Goods, Consumer Confidence, the Case Shiller Home Price Index, and New Home Sales all beat expectations.  That is adding to the improvement in the stock market, which finally began yesterday.  mortgage bonds showed signs of improvement yesterday as well, but have not shown any follow through today.  A few of the Fed members were attempting to address the recent increased market volatility by reiterating their continued support and commitment to QE3.  However, they will have a difficult time cleaning up the fallout from last week’s rogue statements from current Fed President Bernanke.  Given that he is likely on his way out the door soon, he seems to be showing his stubbornness and exerting his massive influence over the financial markets.  The bond market has auctions this week, with $35 billion in 2 year notes today.  We will start with a cautious floating bias.

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