Excerpt from: Flagstaff Mortgages
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| September 17, 2007 | | What will the Fed say in its comments? | | It's all about tomorrow's Fed meeting, as traders wait to hear what the Fed does and says tomorrow at 2:15pm ET (11:15 in Flagstaff). The debate continues on how much the Fed will cut - is it .25 or .50 point? Last week traders were closely split, but today there appears to be more expectation towards a 25bp cut. While the cut itself will be the major headline, bond prices will react to what the Fed says about inflation, and it is the bond prices that matter to mortgage interest rates. If the Fed refutes Mr. Greenspan's view on inflation and holds their position of moderating inflation, bond prices may benefit. But if they state that inflation is worrisome, mortgage bonds will likely come under pressure and rates could go up. | |
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