Week of: Monday, December 14, 2015
Present Market Conditions
It's Fed week! The Two-day Fed meeting kicks off tomorrow and ends on Wednesday with the 2:00pm ET release of the monetary policy statement. The Fed will most likely hike the Fed Funds Rate for the first time in 9 years, by a 1/4 point. At this point, inaction by the Fed would spark a fresh round of uncertainty, so get ready for the hike.
There were no economic reports due for release today. This week's calendar will feature reports on housing, consumer inflation and manufacturing, but they will take a backseat to the Fed meeting.
Mortgage rates moved quickly higher today, more than erasing Friday's strong performance. we're not talking about massive movements in the grand scheme of things.Financial media gets a hold of a plausible story and it tends to get more credit than it deserves for doing something it probably isn't doing all by itself. The fact is that Wednesday's Fed meeting is, was, and will be a focal point for financial markets. Other headlines are most likely being made possible by the uniquely volatile environment surrounding this once-in-a-lifetime rate hike.As always, keep in mind that the Fed rate hike pertains to the Fed Funds Rate, which doesn't directly affect mortgage rates. Additionally, financial markets have already done their best to be in a position for future expectations. A vast majority of the market sees the Fed hiking, so rates have already adjusted accordingly. The subtleties in how the Fed delivers the news will do more to inform the market's reaction. The safest bet continues to be in favor of volatility. In other words, things can go either way, in a big way.