http://MikesDailyMarketReport.com: There are a few items on the Economic Calendar today, but nothing is having any more impact than the FOMC Announcement. But, we'll start with Retail Sales, which dropped by 0.3% in May. Empire State Index, which gauges manufacturing activity in the NY region, contracted again in June to the tune of 1.2. The NAHB Home Builders Index dropped from 69 in May to 67 in June. This index measures the confidence level for Home Builders, whom are stressing over the higher mortgage rates. So, now is what we've all been waiting on.... The FOMC Announcement! The Fed announced a 0.75% (in lieu of the originally planned 0.5%) rate hike, bringing the Fed Funds to 1.75%. The Fed Dot Plot indicated many more hikes for this year, which it jumped from previous estimate of 1.9% to 3.4%. The Fed is aiming well above the Neutral level, which is between 2.0 - 2.5% range, in order to drive down inflation. Earlier in the day, there was a surprise meeting by the ECB, which had the Markets attention. Both of these occurrences moved the Markets back and forth. MBS didn't initially do well after the release of the Fed's statement, but it drastically improved while Fed Chair Powell gave his press speech. It's been hovering between 86-106bps, as yesterday's losses have been made up today. Mortgage Rates improved and more inline with Monday's close. Yields have subsided some, down to 3.33%.
**As Mortgage Rates spiked over 6% over past few days, ask me about our 7/6 ARM, which may be a good alternative for you or your client. Contact me today!**
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