What's going on and why does it matter?
Mortgage bonds opened flat this morning after rebounding off their 30-day moving average yesterday.
**The Fed minutes came out yesterday afternoon and indicated that the Fed will be taking a “gradual” and “controlled” approach to unwinding it's 9-year mortgage bond buying program.
The bond market cheered this news because it means that the Fed is likely to stay involved in the market to at least some degree throughout the remainder of this year. As for today, the Fed's mortgage bond buying is limited to $700 million of 15-year conventional mortgages.
What should you do about it?
Watch for mortgage bonds to continue trading in a range between their 30-day and 200-day moving averages; but be prepared to lock your rate quickly if the market changes directions.