Yesterday afternoon, in a speech to the attendees of the International Monetary Conference in Atlanta, Federal Reserve Chairman Ben Bernanke made it abundantly clear that the Fed’s current accommodative monetary policy stance would remain intact for some time. While the Chairman and other members of the Fed’s Open Market Committee admit to being surprised by how weak the economy appears, none have yet called for additional stimulus in the form of “QE3.” The Fed’s current $600 billion round of government note and bond buying, known as “QE2”, is set to expire at the end of this month. The bottom line – the Fed has no immediate plans to do anything other than their level best to keep interest rates in general – and mortgage interest rates specifically – at, or near, historically low levels through the balance of year.
Uncle Sam will wade into the credit markets this afternoon looking to sell $21 billion of 10-year notes. As I write, all indications suggest demand will be decent but not “barn-burning” for this offering. If my assessment proves accurate, look for the event to be mortgage market neutral. I’ll post the auction results on my website as soon as possible once the final gavel falls at 1:00 p.m. ET.
THE MARKET IS ALWAYS RIGHT! … YOU AND I ARE SOME OF THE TIME
