Daily Market Update 5/23/13

Mortgage rates were little changed Thursday after moving higher on Wednesday.  Yesterday, in testimony before Congress, Fed Chairman Ben Bernanke said that it’s possible the Fed could taper its purchases of mortgage-backed securities (MBS) at one of its “next few meetings” based on economic conditions.  According to Bernanke, the main requirement for reducing monetary stimulus is “sustainable” improvement in the labor market.  Many investors were surprised by this, and MBS markets sold off sharply.  Later, the Fed released minutes from the May 1 FOMC meeting which suggested wide disagreement among Committee members about the timing of Fed tapering of its purchases of Treasurys and MBS, also known as Quantitative Easing.  This morning mortgage rates hit their highest mark in over a year.

In economic news, weekly Jobless Claims fell to 340,000, a bit below forecast.  New Home Sales rose by 2.3% to 454,000 annual units, beating expectations.  Stocks moved lower.  Financial markets remain extremely volatile.  No other key data will be released today.

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