27 Jan Rate Drop / Fed Stimulus
Hope everyone is having a great day!
Mortgage pricing got better today and we are able to refinance many of our clients to a 2.850% rate with no out of pocket cost. Check out our rate tool to see if this is an option for you! à Find Your Best Rate
The economic rebuild from COVID dominated todays Fed meeting as they projected that the US economy will bounce back this year (4.2% projected economic growth in 2021) once the vaccine is widely available. However, they acknowledged the pull back that they have seen in recent weeks and assured that they will continue to provide stimulus until they are able to get unemployment at a sustainable level and increase inflation to 2%. They will continue to hold short-term rates close to 0% and said that they have discussed more targeted stimulus check plans.
Mortgage Backed Securities continue to climb – up 19 bps since market open. This morning, they broke above on the their key ceilings, the 50 day moving average. MBS are now in a critical position and have potential to shoot up to all time highs but also have potential to crash through the floors that they have broken above over the past 2 weeks. The determining factor is going to be the stock market which is showing some technical signs of weakness and is down over 200+ bps today. If stocks continue to fall, this will put downward pressure on mortgage rates and maybe allow us to see the all time low pricing that we had at the end of 2020. Because we are at such a volatile point, we recommend locking in the gains that we have seen over the past 2 weeks.