In just a few hours, the FOMC is
expected to announce a highly anticipated increase in interest rates.
Couple that with the Alabama Senate election results from last night and
financials markets are a little skittish this morning. Equities are higher
but more importantly bond yields are also down. The 10-year is now at 2.37%
off from yesterday's closing levels at 2.40%. Mortgage prices are up as
well, +8 bps now.
Aside from the FOMC today, core CPI this morning was a little disappointing
as the price index was up +0.12% last month and +1.7% year-over-year. Rate
sheets should hold steady as we head into the afternoon. Assuming the FOMC
delivers on the markets expectations, prices will not likely be impacted by
the announcement but analysts will be watching very closely for any signals
about rate hikes in 2018. If there are surprises in those indications, MBS
could go either direction.