Mortgage applications came in higher again last week, as more consumers took advantage of another pullback in mortgage rates, according to the Mortgage Bankers Association. The MBA’s Market Composite Index, a measure of weekly loan volume based on surveys of association members, increased 3% on a seasonally adjusted basis for the seven-day period ending March … [Read more…]
There was some debate as to whether or not the Federal Reserve would hike the Fed Funds Rate today, although the consensus was for a 0.25% increase. That’s exactly what the Fed delivered. Additionally, markets were (and still are) betting that the Fed cuts rates by roughly 0.75% by the end of the year, but the Fed’s just-released forecasts show zero rate cuts by the end of the year and slightly HIGHER rates by the end of 2024. Despite all this, Treasury yields (a benchmark for mortgage rates) and mortgage rates themselves fell significantly after the Fed news came out. Why in the world could that happen? First off, the Fed Funds Rate is not a mortgage rate, nor does it directly affect mortgage rates by the time the Fed actually hikes or cuts. More importantly, Fed Chair Powell spoke about upcoming tightening of lending conditions due to the recent banking drama. That may seem like a simple enough comment, but it carries a lot of weight in terms of shaping economic momentum. Lending and credit are critical to growth and inflation. If lending subsides (fewer loan programs or more restrictive requirements to qualify), it puts additional downward pressure on inflation. And inflation is the key reason rates have remained high. Long story short, in spite of the Fed rate hike and the relatively unchanged outlook for 2024, the market saw some indication of a policy pivot in Powell’s comments–some shifting of the big picture cycle of economic growth and inflation. Either that, or Powell’s warning on banks caused investors to fear additional banking issues in the days/weeks ahead.
Mortgage rates fell last week, spurring an increase in demand. But a volatile secondary market is causing challenges.
One of the issues that many people have been concerned with during this recession is what happens when a bank is seized by the FDIC. This is a matter of concern because the recession saw quite a few bank closings, and there are still hundreds of banks still on the FDIC watch list for potential […]
The post What Happens When Your Bank is Seized by the FDIC? appeared first on Good Financial Cents®.
Pacific Western Bank has acted to guarantee more liquidity via private and federal facilities but excluded the possibility of raising capital at this moment, it announced on Wednesday.Â
The Federal Reserve raised interest rates at a ninth straight meeting and indicated there may be more hikes to come in a clear sign it’s confident that its bid to quell inflation won’t deepen a nascent banking crisis. The Federal Open Market Committee voted unanimously to increase its target for the federal funds rate by … [Read more…]
Mortgage rates, which climbed one day and dropped the next after the bank failures, will be volatile before stabilizing, experts say.
The Fed has decided to forge ahead in its fight against inflation, despite several bank closures that have caused turbulence in the financial markets.
