As always, I have over-analyzed the text of the FOMC statement. Below is the December 2009 FOMC Statement. I have picked it apart to draw attention to alterations. My comments are in bold , FOMC statement text is italicized . Additions made to the text are highlighted For immediate release. Information received since the Federal Open Market Committee met in November suggests that economic activity has continued to pick up and that the deterioration in the labor market is abating . I used this statement update in my headline because this addition to the text was the source of knee jerk weakness in the bond market at 2:15pm. This is an upgrade to the Fed's outlook on the labor market, however I do not view this as a sign of IMPROVEMENT as much as I take this as a way for the Fed to say that…(read more)
An extremely busy day awaits markets as the Federal Open Market Committee kicks off its last two-day meeting of the decade. Two hours before the opening bell investors are being cautious. The S&P 500 hit 14-month highs yesterday but this morning futures are off 3.00 points to 1,108. Similarly, Dow futures are down 25 points to 10,412 and Spot Gold is $12.25 lower at $1,114.45. Somewhat conversely, WTI Crude oil is up a slight 14 cents to $69.65 per barrel, yet that’s 15% off its highs from late October. “The US$ is stronger against most of the majors, particularly the euro which continues to struggle amid financial-sector problems in Austria and concerns over the fiscal situation in Greece,” noted BMO analyst Robert Kavcic. Key Events Today: 8:30 ― The Producer Price Index…(read more)
Most mortgage rates moved up during the most recent week according to information released on by both Fannie Mae and Freddie Mac. The 30-year fixed-rate mortgage (FRM) was up ten basis points according to Freddie Mac's Primary Mortgage Market Survey for the week ended December 10. The average was 4.81 percent for the week with fees and points unchanged at 0.07 point. The 15-year FRM rose to 4.32 percent with 0.6 point compared to the week before when the average was 4.27 percent also with 0.6 point. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) was also higher this week, rising to 4.26 percent with 0.5 point from 4.19 percent with 0.5 point. The 1-year Treasury-indexed ARM was slightly lower for the week, moving from 4.25 percent to 4.24 percent. Fees and points were…(read more)
Most mortgage rates moved up during the most recent week according to information released on by both Fannie Mae and Freddie Mac. The 30-year fixed-rate mortgage (FRM) was up ten basis points according to Freddie Mac's Primary Mortgage Market Survey for the week ended December 10. The average was 4.81 percent for the week with fees and points unchanged at 0.07 point. The 15-year FRM rose to 4.32 percent with 0.6 point compared to the week before when the average was 4.27 percent also with 0.6 point. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) was also higher this week, rising to 4.26 percent with 0.5 point from 4.19 percent with 0.5 point. The 1-year Treasury-indexed ARM was slightly lower for the week, moving from 4.25 percent to 4.24 percent. Fees and points were…(read more)
The Treasury Department released data Thursday on activity in its Making Home Affordable (HAMP) program during the month of November. As expected from earlier comments made by Treasury officials, borrowers continued to enter the program under trial modifications, but the rate of permanent modifications remains well below expectations. Cumulative figures for the program by the end of November show participating servicers had sent a total of 3,137,548 requests for financial information to borrowers thought eligible for the foreclosure prevention program and had extended 1,032,827 invitations to participate in a trial modification program, up from 920,000 in October. There are currently 728,408 borrowers actively participating in loan modifications, however, only 4.3 percent of those modifications…(read more)
The Treasury Department released data Thursday on activity in its Making Home Affordable (HAMP) program during the month of November. As expected from earlier comments made by Treasury officials, borrowers continued to enter the program under trial modifications, but the rate of permanent modifications remains well below expectations. Cumulative figures for the program by the end of November show participating servicers had sent a total of 3,137,548 requests for financial information to borrowers thought eligible for the foreclosure prevention program and had extended 1,032,827 invitations to participate in a trial modification program, up from 920,000 in October. There are currently 728,408 borrowers actively participating in loan modifications, however, only 4.3 percent of those modifications…(read more)
It appears that many at the Treasury Department are keeping their fingers crossed as December 31 approaches. That is the date by which a large number – nearly 375,000 – of loan modifications will have completed the three-month trial period required under the Home Affordable Modification Program (HAMP) designed to keep homeowners out of foreclosure. No one appears to know at this point how many homeowners will actually be able to transition from the trial into a permanently restructured loan. This information was presented today by Treasury Assistant Secretary for Financial Stability Herbert Allison in a written report to the House Financial Services Committee. Allison told the Committee that "we are disappointed in the permanent modification results thus far," and said that "we…(read more)
The relatively slow week ahead should give financial markets plenty of time to digest Friday’s employment news, which saw the nation’s unemployment rate fall to 10.0% as just 11,000 jobs were lost in the month ― the smallest monthly decline since December 2007. Key data doesn’t hit markets until Thursday so lots of attention will be put on Ben Bernanke’s Monday speech. The dollar rallied on the jobs report and this morning those gains have been extended to a one-month high. The dollar is gaining against commodity currencies and the euro is below $1.48, though no progress has been made against the yen. In contrast to the dollar, equities are falling alongside oil prices and gold. Two hours before the week’s opening bell, the Dow is 33 points lower at 10,367 while…(read more)
The Federal Reserve today reported on their weekly purchases of agency mortgage-backed securities (MBS). In the four trading days between November 27 and December 2, the Federal Reserve purchased a total of $16.00 billion agency MBS. In those four days the Federal Reserve sold no agency MBS. The goal of the Federal Reserve's agency MBS program is to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally. Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for the program. The program includes, but is not limited to, 30-year, 20-year and 15-year securities of these issuers. Since the inception of the program in January 2009, the Fed has spent $1.06 trillion in the agency…(read more)
The US Labor Department released their report on initial jobless benefit claims this morning. Jobless claims fell to 457,000 in the week ending Nov. 28 week. This is 5,000 less than the previous week and much better than consensus estimates of 480,000. Last week's jobless claims data was revised for the better, from 466,000 to 462,000. This was the smallest amount of new jobless claims since September 6, 2008 when initial claims totaled 447,000. The 4- week moving average for Jobless claims fell to 481,250 from the previous read of 495,500, which was revised lower from 496,500. This is the lowest 4-week average since November 1, 2009 when it was 480,250. Continuing claims rose to 5.465 million in the week ending Nov. 21, less than the market was expecting but higher than last week's…(read more)
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