Recession 2020

According to the Bureau of Economic Research, the US economy was already on the decline before the COVID pandemic hit.  This aligns with our previous forecast of a recession in 2020.  The fact that COVID hit the economy as hard and fast as it did could help in the recovery process.  Rather than this be a slow and steady fall, we hopefully hit the bottom quickly and bounced higher. Although I personally don’t think that we will experience a V-shaped recovery, I do believe that the worst part of the cycle is behind us.  As long as a second round of COVID does not force another round of shutdowns, we should see improvement from here.  However, just not to pre-COVID levels.


The Federal Reserve will be concluding their two day meeting at noon MD time.  We do not expect to see any changes to interest rates, additional stimulus plans announced, or any changes to current market stabilization strategies.  However, immediately following the rate and policy announcement, Fed Chairman Jerome Powell is set to speak.  Such times are known to add volatility to the markets, so we could see movement in mortgage rate pricing throughout the day.  Given that GDP is expected to see GDP fall by 6% this year, it will take a lot of ongoing effort by the Fed to help get our economy back on track.  This is good news for mortgage interest rates in the short and medium term.


With unknown volatility of the Fed announcement, the safe play will be to have a locking bias.  Although mortgage bonds do have a little improvement left in them, the risk may not justify the potential reward.

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