Florida Mortgage Rates – Evening Market Report

by Florida's #1 Mortgage Planner on September 16, 2008

Locking Stance:  LOCKING     Mortgage Bonds:  -88bp

Mortgage bonds ended the day down 88 basis points.  There were several reasons for this, virtually all stemming from the Fed.

The Fed made their decision to keep the Fed Funds Rate unchanged and they expressed concerns about a weakening economy.  The caution that concerns traders is that the Fed says they expect inflation to moderate but remain highly uncertain about where inflation is headed.  Simply put, they remain concerned about higher inflation despite lower food and energy costs.

Adding fuel to the fire is that the Fed may be changing their viewpoint on AIG and may be set to bail them out as well since they are the largest insurer in the world.  That is sending stocks higher, which pulls money from mortgage bonds.  So, once again we see the Fed rushing to save the stock market and bonds faltering as a result, dropping through two layers of support in the process.

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