WEDNESDAY AFTERNOON UPDATE:
This week’s FOMC meeting has adjourned with an announcement that the Fed has lowered key short-term interest rates by a quarter point. This move was widely expected as they look to balance support for a softening employment sector while preventing inflation from moving higher. It was a 10-2 vote with one dissent voting to keep rates unchanged and the other wanting a half-point reduction.

They also said they were ending their program that is called quantitative tightening on December 1st. This is where they allow securities on the balance sheet to roll off when they mature instead of reinvesting the proceeds into the new securities. They do this to reduce their balance sheet gradually.

It is Chairman Powell’s comments during his press conference that is causing the most commotion though. He pretty clearly stated that another rate cut at December’s FOMC meeting is not a foregone conclusion because of the uncertainty in the economy and the lack of data from the government shutdown. Market analysts were mostly expecting another quarter-point cut to key rates at that meeting.

The market reaction has been negative so far. Stocks have reversed course from their morning gains, with the Dow now down 44 points and the Nasdaq up 77 points. The bond market is currently down 21/32 (4.05%), which is enough of a move from this morning to cause an intraday increase in mortgage rates of approximately .250 - .375 of a discount point.

There was no relevant economic data posted this morning and there is none set for tomorrow. The extended government shutdown is preventing another key report from being posted tomorrow (initial 3rd quarter GDP reading), leaving us with just a speaking event from Fed Vice Chair of Supervision Michelle Bowman and corporate earnings releases for the markets to focus on. Vice Chair Bowman is making opening remarks for a regulatory meeting late tomorrow morning via prerecorded video. This means she will not be taking questions from the audience, making it less likely that we will hear something relevant or surprising.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Lock if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.