The Fed MBS Handouts Are Almost Over

  This is going to be a busy week in terms of economic information.  Bernanke will be testifying this week to the Senate and the house for his semi annual testimony on monetary policy and the overall economy.  To make thing worse there is a scheduled $118 billion Treasury notes to be auctioned.  Bernanke’s testimony was delayed from last week to this week due to the resent snow storms.  Makes you wonder if Mr. Gore will be attending.  The recent testimonies’ with Fed officials and Treasury officials have been interesting with politicians as they grandstand for their districts.  If the people they represent really understood they would be sickened by most of their actions. 

  I am sure that Bernanke will tell us that the economy continues to improve and that prime rate will remain unchanged.  More of the same old stuff.  We should all pay close attention to the subject of Fed purchased MBS and to when these programs will stop.  I would believe it is safe to say that we can expect rates to climb as soon as the Fed’s stop purchasing MBS. 

Items of economic interest this week.

Tuesday

  • 9:00 AM Case/Shiller HM Price Index
  • 10:00 AM Feb Consumer Confidence Index
  • 1:00 PM $44 Billion in 2 Yr Note Auction  

Wednesday

  • 10:00 AM Jan New Home Sales
  • 10:00 AM Bernanke Begins His Testimony Before The House
  • 1:00 PM 42 Billion in 5 Yr Note Auction

Thursday

  • 8:30 AM Weekly Jobless Claims
  • 8:30 AM Jan Durable Good Orders
  • 10:00 AM FHFA Housing Price Index
  • 10:00 AM   Bernanke Begins His Testimony Before The Senate
  • 1:00 PM 32 Billion in 7 Yr Note Auction

Friday

  • 8:30 Q4 Preliminary GDP
  • 9:45 AM Feb Chicago Purchasing Manager Index
  • 9:55 AM University of Michigan Final Feb Consumer Settlement Index
  • 10:00 AM Jan Existing Home Sales

  Rate will take a beating this week with all of the Treasury notes available.  We will have to wait and see how the market responds later this week.  The MBS did not change much with only a 12 bps.  Below is a 90 day graph of the current Mortgage Bond Market.  Keep in mind that the higher the Mortgage Bond market the lower the rate you can get. 

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