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What to Expect From The Fed Today
What to Expect From The Fed Today
The Fed rate announcement is at 2pm ET. A single 25bp rate cut is fully priced in to the bond market and that cut will not be responsible for any volatility you see at 2pm. A 50bp cut is something that some people have mentioned, but not something that is worth realistically considering. 2pm volatility will primarily be a factor of the dot plot (Fed member rate expectations released in the Summary of Economic Projections). In the dots, 2025's year-end level is the most important. Since today's cut takes the FFR (Fed Funds Rate) to 4.125, the question is whether the median 2025 dot will be 3.875 or 3.625 (2 more cuts vs the 3 cuts that the market is currently pricing in with a 75% probability). It will almost certainly be one or the other. At 2:30pm, Fed Chair Powell's press conference always has the potential to add to or push back against the prevailing 2-2:30pm momentum, but typically, if the dots produce a big reaction, they matter more than Powell.
Modestly stronger overnight and little-changed so far this morning. MBS up 1 tick (.03) and 10yr down half a bp at 4.027
Just barely weaker now. MBS down 1 tick (.03) and 10yr up less than half a bp at 4.035
Stronger after the dot plot. MBS up just over an eighth and 10yr down 3.3bps at 3.998
MBS now down 2 ticks (.06) on the day. 10yr yields are up 2.3bps at 4.053
MBS now down a quarter point on the day and 10yr up 5bps at 4.08
Big Shift Toward 5.0 MBS Continues
| Time | Event | Period | Actual | Forecast | Prior |
|---|---|---|---|---|---|
| Wednesday, Sep 17 | |||||
| 12:00AM | Roll Date - UMBS 15YR, Ginnie Mae 15YR | ||||
| 7:00AM | Sep/12 MBA Purchase Index | Sep/12 | 174.0 | 169.1 | |
| 7:00AM | Sep/12 MBA Refi Index | Sep/12 | 1596.7 | 1012.4 | |
| 7:00AM | Sep/12 Mortgage Market Index | Sep/12 | 386.1 | 297.7 | |
| 8:30AM | Aug Housing starts number mm (ml) | Aug | 1.307M | 1.37M | 1.428M |
| 8:30AM | Aug Building Permits (ml) | Aug | 1.312M | 1.37M | 1.362M |
| 10:30AM | Sep/12 Crude Oil Inventory (ml) | Sep/12 | -9.285M | -1.5M | 3.939M |
| 2:00PM | Fed Interest Rate Decision | 4.25% | 4.25% | 4.5% | |
| 2:00PM | FOMC Economic Projections | ||||
| 2:00PM | Interest Rate Projection - 1st Yr | 3.4% | 3.6% | ||
| 2:00PM | Interest Rate Projection - Current | 3.6% | 3.9% | ||
| 2:00PM | Interest Rate Projection - 2nd Yr | 3.1% | 3.4% | ||
| 2:00PM | Interest Rate Projection - Longer | 3% | 3% | ||
| 2:00PM | Interest Rate Projection - 3rd Yr | 3.1% | 3.1% | ||
| 2:30PM | Fed Press Conference | ||||
| 2:30PM | Powell Press Conference | ||||
| Thursday, Sep 18 | |||||
| 8:30AM | Sep/06 Continued Claims (k) | Sep/06 | 1950K | 1939K | |
| 8:30AM | Sep/13 Jobless Claims (k) | Sep/13 | 240K | 263K | |
| 8:30AM | Sep Philly Fed Business Index | Sep | 2.3 | -0.3 | |
| 8:30AM | Sep Philly Fed Prices Paid | Sep | 66.80 | ||
| 10:00AM | Aug CB Leading Index MoM (%) | Aug | -0.2% | -0.1% | |
| 1:00PM | 10-yr Note Auction (bl) | 19 | |||
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