October 29th, 2008 9:16 AM by Lehel Szucs
Wednesday's bond market has opened in negative territory again as investors await today's FOMC meeting adjournment. The stock markets were trading higher earlier but are now in negative territory after yesterday's huge rally. The Dow is currently down 32 points while the Nasdaq is down 14 points. The bond market is currently down 5/32, which will likely push this morning's mortgage rates slightly higher.
The Commerce Department reported this morning that Durable Goods Orders for September rose 0.8% when they were expected to fall 1.0%. This means that manufacturing activity was stronger than expected, which is bad news for bonds and mortgage rates. However, since the markets are directing their attention to today's FOMC results, the higher than expected orders has not had much of an impact on this morning's mortgage rates.
The FOMC meeting began yesterday and will adjourn at 2:15 PM ET today. There is now a pretty large consensus that the Fed w ill lower key short-term interest rates at this meeting, but what is being debated is the size of the cut. Some analysts are calling for a .750 cut while the majority think a half-point reduction is coming. This makes the post meeting statement even more important than usual as traders will try to figure out if the Fed thinks this is the last cut or if they are prepared to make another in the future.
Look for an update to this report shortly after the markets have had an opportunity to react to the Fed move and the post-meeting statement.
If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guarant eed to be in the best interest of all/any other borrowers.
©Mortgage Commentary 2008