With the release of the Fed report today, the lock/float suggestion is going to be most likely updated after the 2:15pm mark (time that the Fed will make their announcement).
Here’s what happened so far today. The GDP report which showed a significantly week economy in comparison to what analysts were expecting. This has kept the market rather stagnant today so far. Another reason that the markets have not taken very many turns today (either up or down) is more so because of the anticipated news release of the Fed.
So, will this Fed decision help or hurt us?
Overall, this will push inflationary concerns and not be a good thing for long term mortgage pricing. However, in the next day or two, if the Funds rate is cut again, we could see an increase in bond prices and mortgage backed securities which will be good for overall prices. That being said, if you remember what happened after the emergency rate cuts (two days after) the bonds started taking a huge hit and we lost significant amounts in pricing.
With regard to consumer loans, business loans, ARM’s, and Home Equity Loans this cut will help the pricing.
So, with the MBS right now trading 9bps under yesterday’s day end price, I am putting a float suggestion out for today. But, that also comes with the caution that depending on the Fed’s statement, the bond prices could significantly alter pricing for the worse either tomorrow evening or the following day.
