Fed just concluded their 2 day meeting and as expected they kept the Fed funds rate the same but in their announcement they indicated no rate hikes for the rest of 2019 and they downgraded the economy outlook from 2.2% to 2.1% GDP. Keep in mind that the White House has been saying GDP will be at 3% so there’s a huge disconnect there. Inflation is totally muted both here and abroad.
In regards to the balance sheet for the Fed they indicated that in May they will only let $15 billion in Treasuries fall off the balance sheet and reinvesting the other $15 billion into treasuries (they are currently letting around $30 billion a month fall off the balance sheet so basically as of May they will cut that in half AND by Sept or October they will stop reducing their balance sheet on both treasuries and mortgage backed securities.
$20 billion in mortgage backed securities currently being run off each month until Sept or October so no reinvestment into more MBS.
Mortgage backed securities are rallying big time right now and the 10 year treasury is down to 2.54%.
If you have a question about mortgage rates or loans in general please schedule a consultation by clicking HERE.
Mitch Lichterman – Loan Originator-TargetRate.com
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Email:Mitch@TargetRate.com <mailto:Mitch@Okolia.com>
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