Fed’s Plan for Balance Sheet
During the quantitative easing years of 2008 through 2014, the Fed acquired trillions of dollars of Fannie Mae, Freddie Mac and Ginnie Mae mortgage-backed securities (Agency MBS) and U.S. Treasuries. Its balance sheet grew from under $1 trillion to over [...]
Focus on French Election
MBSQuoteline Weekly News focuses on the French Election. Click on link for full story: https://www.mbsquoteline.com/newsletter/view/255/16560/0/3
French Presidential Election
The first round of the French Presidential election will take place on Sunday. It is significant for global markets because of its potential implications for the future of the European Union (EU). The two candidates who receive the most votes [...]
Trump Trade Reverses
Since the election, stocks have performed very well, while bonds yields have risen. This was due to expected policy changes under the Trump administration which would boost economic growth. Stronger growth is good for the economy and for stocks, but [...]
European Elections
One source of volatility for MBS prices is uncertainty about the outcome of upcoming elections in several European countries. Investors are most focused on the presidential election in France which will take place on April 23. Polls show a close [...]
Yellen Testimony
In her semi-annual testimony to Congress, Fed Chair Yellen said that the Fed expects that economic progress will call for "further gradual increases" in the federal funds rate. She also said that it would be "unwise" to wait too long [...]
Effect of Tax Cuts
President Trump today said to expect an announcement about tax cuts in two to three weeks. Mortgage rates moved a little higher after the comment. There are two reasons why tax cuts are viewed as negative for mortgage rates. The [...]
Fed Meeting
As widely expected, the Fed raised the federal funds rate by 25 basis points. Unfortunately for MBS, Fed officials also raised their outlook for the pace of future rate hikes. They now forecast three rate hikes in 2017, one more [...]
Italian Referendum
Next Sunday, voters in Italy will decide on a referendum presented by Prime Minister Matteo Renzi which would reform the constitution to speed up lawmaking and to produce a more stable government. If the referendum fails to pass, there is [...]
Yellen’s High-Pressure Economy
In a speech this afternoon, Fed Chair Yellen surprised investors with a potential new twist on U.S. monetary policy. Yellen put forth the possibility that a “high-pressure economy may be the best approach to repair the damage done during the [...]
ECB Comments Hurt MBS
Comments from an unnamed official at the European Central Bank (ECB) caused global bond yields to rise today, including U.S. MBS. The official said that a “consensus was being formed to gradually taper the ECB’s bond buying program when they [...]
Special Update: Brexit
This week, a major influence on U.S. mortgage rates will be the “Brexit vote on Thursday. It is very difficult to predict the effect on the global economy if the UK were to leave the European Union or whether it [...]