Daily Market Update

Rates held steady as today’s economic data had little impact on mortgage-backed securities markets. The Producer Price Index came in close to expectations, although the closely-watched “core” rate rose above forecast. February Housing Starts jumped 22% from January to an annualized rate of 583,000 units, far above consensus. Building Permits, a leading indicator, also rose. Stocks were mixed. The Federal Open Market Committee (FOMC) begins a two day meeting today to discuss monetary policy. No rate changes are expected, although investors are waiting to see if the Fed announces plans to purchase Treasurys. Such a move might lower long-term rates temporarily but could prove inflationary over time.

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