Daily Market Update 9/18/13

Rates faced upward pressure Wednesday as investors eagerly awaited this afternoon’s Fed policy statement.  In economic news, Housing Starts rose by 1% in August to an annual rate of 891,000, below the consensus forecast of 910,000.  A decline in multi-family units accounted for the shortfall.  No other key economic data will be released today.  The Fed statement will come out at 2:00 PM, followed by a press conference by Fed Chairman Bernanke at 2:30.  It is expected that we will learn additional details about the timing and scale of Fed tapering of bond purchases, how it will be divided between Treasuries and mortgage-backed securities, and how future purchase reductions will be determined.  The Fed will also release its economic forecast for 2016.  Extreme rate volatility is possible.

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