What Happened Last Week?
Back to Uneventful Already?
MBS ended the trading day Friday at almost perfectly unchanged levels–not the sort of thing one might expect on what was yet another exceptionally volatile week with both a presidential election and Fed announcement. Part of the reason is that MBS happened to align well with the portion of the yield curve that was right in the middle of gains and losses. In other words, 2-3 year Treasuries sold off. 10-30 year Treasuries rallied. 5-year Treasuries were roughly unchanged, just like MBS. So no, they’re not quite back to “uneventful” yet, even though things have calmed down markedly from last Wednesday morning.
Source: Matthew Graham, Mortgage News Daily 11/8/2024)
What’s on the Agenda for This Week?
Domestic Flavor
Inflation Nation: The October headline Consumer Price Index (CPI) came in largely as expected by rising 0.2% on a MOM basis and 2.6% on a YOY basis (up from 2.4%). Core (ex-food and energy) CPI rose by 0.3% on a MOM basis which now marks the 53rd consecutive month of increases, and remained at 3.3% on a YOY basis.
The Talking Fed: Today we will hear from Kashkair, Williams, Logan, Musalem and Schmid.
Market Wrap-up
Inflation Nation: The October headline Consumer Price Index (CPI) came in largely as expected by rising 0.2% on a MOM basis and 2.6% on a YOY basis (up from 2.4%). Core (ex food and energy) CPI rose by 0.3% on a MOM basis which now marks the 53rd consecutive month of increases, and remained at 3.3% on a YOY basis.
The Talking Fed: Today we heard from a few different FOMC members and their messages were aligned with current expectations of lower and slower cuts. Kashkari said that the inflation data is the key to the Fed’s next move. Logan says that the policy rate may be very close to the “neutral rate” and Musalem sees an increased risk of stalled inflation (reduction) progress.
Trifecta: The Republicans have kept control of the House and will have the White House, Senate and House in 2025. This has markets considering the possibilities of tax cuts/policy and regulatory changes that could shape the economy in the 2nd half of 2025.
On Deck for Tomorrow: PPI, Core PPI, Initial Weekly Jobless Claims, Fed Chair Powell