interest rates Tag Archives

Economic and Fixed Income Insights, September 17, 2019

In a widely anticipated move, the Federal Reserve cut rates by another quarter-point, setting the target range for the federal funds rate at 1.75 – 2.00 percent.  In their summary statement, the Federal Reserve maintained a generally positive outlook of both the labor market and household consumption, but noted a decline in both exports and business spending. According to the “dot plot,” officials were split on the appropriate future path for rates. 

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Economic and Fixed Income Insights, September 3, 2019

On Tuesday, the Institute for Supply Management Manufacturing Index unexpectedly declined from 51.2 to a reading of 49.1 in August, the lowest level since January 2016, and marking the first contraction (a reading below 50) in three years. As the global manufacturing slump extends to the U.S., investors are betting on larger Federal Reserve rate cuts coming before year-end. According to Bloomberg, the probability of a 50-basis point cut later this month has jumped from 7 percent to 30 percent.

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Economic and Fixed Income Insights, Aug. 20, 2019

Sales of existing homes were up 2.5 percent in July as tumbling rates provide some relief to the housing market. The average 30-year mortgage rate has fallen to 3.6 percent as yields remain depressed on mounting recession fears. Later this afternoon, minutes from the Federal Reserve’s July meeting will offer some insight into its recent decision to cut interest rates. Investors and the White House are calling for further stimulus at next month’s meeting.

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Economic and Fixed Income Insights, Aug. 13, 2019

As the flight-to-quality trade continues with investors fleeing equities and jumping into bonds, stocks remain under pressure amid mounting international uncertainty. According to Bloomberg, the U.S. yield curve is at its flattest level since 2007. On the housing front, mortgage applications increased 21.7 percent from a week earlier. The 30-year fixed mortgage rate decreased eight basis points to yield 3.93 percent, the lowest level since November 2016, and has now dropped more than 80 basis points this year. Rates remain volatile and continue to trend lower on global uncertainty.  The benchmark ten-year UST remains near recent lows at 1.71 percent and the long bond dropped another seven basis points to 2.16 percent. In the tax-exempt market, the ten-year MMD fell seven basis points and the 30-year MMD fell 12 basis points.  

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Economic and Fixed Income Insights, August 6, 2019

A re-escalation of trade tensions between Washington and Beijing has continued to fuel a sell-off in global equities which began after the Federal Reserve signaled the cycle’s first rate cut last week was a preventative “mid-cycle” move. In other economic news, mortgage applications increased 5.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 2, 2019.

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Economic and Fixed Income Insights, July 30, 2019

The Federal Reserve lowered its benchmark rate by 0.25 percent on Wednesday, citing implications of global developments for the economic outlook as well as muted inflation pressures. It was the first rate cut by the central bank in more than a decade. The Fed also left the door open to future cuts, saying it will “act as appropriate to sustain the expansion.”

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