Happy Hump Day. I waited to write the post until after the FOMC announcement regarding the Fed Funds rate and it was just released and there were no surprises. They left the rate right where it is and there was only one dissenting vote.
I wrote in my blog post on Monday that I thought they would leave the rate where it was at least until September's meeting. Durable Goods Orders came in much weaker than expected at -4.0% vs. estimates of - 1.1%. Ex-transportation, they were expected to be +.3% but were -.5%. While we have had a few positives in manufacturing data lately, we have had a lot of negatives and this just adds to the list. Jobs data also hasn't been nearly as strong as it should be if the economy were really having a strong recovery. This recovery remains tenuous at best which is why the Fed left the rates as is. In their comments they said the near-term risk has diminished and the economy is expanding at a moderate rate.
This news along with the weak durable goods numbers this morning is helping the FNMA benchmark bond to reverse course from the last two days. It is currently up 20 basis points and is bumping up against the 1st level of resistance at 103.63. No sooner did I write that last sentence but it bumped up another 9 basis points and is now that much above the resistance level at 103.72. Rates are great so locking isn't a bad thing, especially if you or a client has a loan closing in the near future (15 days or sooner). However, if the bond closes above the 1st level of resistance, we might get some follow through tomorrow so it might be worth it to float. If you do float, keep your eye on the bond market - you can use buyerZapp to do this; the link is in the upper right hand corner of my blog - so that you can act quickly if the bond begins to sell off.
That's all for today. Make it a great day.