Daily Commentary by Larry Baer: Worries about the likely outcome of the ongoing Greek debt swap negotiations together with a sense of caution ahead of the conclusion of the Federal Open market Committee meeting later this afternoon is combining to support the prospects for steady mortgage interest rates in early trading.
For the first time ever, the FOMC post-meeting statement will include committee members' forecasts for the level on the Fed's short-term benchmark interest rates in the future. The Federal open market committee will probably reveal that it does not expect to begin raising benchmark interest rates until at least 2014. If the Fed is convincing enough with its justifications for keeping interest rates low for an extended period of time -- there is a chance mortgage interest rates could edge fractionally lower during the second half of the day as investors move to price-in the new information. Since mortgage investors are not sure what to expect -- they will approach today's event cautiously. The Fed will release their post meeting statement at12:30 p.m. ET and I'll provide you with an overview of any meaningful changes contained in the document as soon as possible after its release.
To accommodate the Fed's schedule, the Treasury Department has moved the conclusion of its $35 billion 5-year note auction from its normal 1:00 p.m. ET time slot this afternoon to 11:30 a.m. ET. The shift in schedule may result in weaker than normal demand from bidders at today's auction since many buyers may choose to wait to review the Fed's post-meeting statement before committing additional capital to the credit markets today. If so, it may be difficult for mortgage interest rates to gain significant traction to lower levels in this morning's early going.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
