feb 24 rates

A sigh of relief as we back down from the dreaded 4%. From yesterday’s MND:


Mortgage rates had their best day of the month today following Fed Chair Yellen’s testimony before the Senate Banking Committee.  That’s part of a 2-day semi-annual update that the Fed gives to congress.  In this modern electronic age, it’s a wholly unnecessary relic from a bygone era when everything that every member of the Fed has said on the record wasn’t instantly available on the web.  And so it has devolved into a painful display of American bureaucracy where congress-people can vent their frustrations or display their ignorance for a quick sound-byte.  All that having been said, markets still treat this as the Fed Chair’s twice-a-year chance to set the record straight in a Q&A format, less constrained by the formalities of official FOMC communications.

This time around, market participants were anxious about the possibility that Yellen would say something to confirm an accelerated rate hike time frame.  Last week’s Fed Minutes suggested patience in that regard, but the meeting where those minutes were recorded took place before the most recent jobs report.  The risk was that the super strong employment data would somehow accelerate the Fed’s timeline, resulting in a rate hike within the next few meetings.  After hearing from Yellen today, trading levels went back to suggesting a September rate hike.

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