Positive Jobs Report, Higher Mortgage Rates? Published: Friday, 4 Dec 2009 By: Diana Olick CNBC Real Estate Reporter I'm not sure what half of a nanosecond is, but that's about how long it took after the positive jobs announcement this morning, for folks to start ruminating about the Fed raising interest rates; in turn, one more half of a nanosecond later, and someone asked me what all that would... [more]
Positive Jobs Report, Higher Mortgage Rates?
Published: Friday, 4 Dec 2009
By: Diana Olick CNBC Real Estate Reporter
I'm not sure what half of a nanosecond is, but that's about how long it took after the positive jobs announcement this morning, for folks to start ruminating about the Fed raising interest rates; in turn, one more half of a nanosecond later, and someone asked me what all that would mean for mortgage rates.
Here's an answer from Miller Tabak's Peter Boockvar:
The real question is how will the bond market react to Fed rate hikes? Would they be encouraged by the Fed’s inflation fighting and keep longer term rates low, or will they focus more on the improving economy and inflation expectations and send longer term rates higher notwithstanding Fed action? An impact is being felt though now, as today, the 30 yr FNMA coupon is rising a large 13 bps to 4.295%, the highest in a month, and mortgage rates have been running about 100 bps above that. The MBS yield is up 36 bps just this week.
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Response by UWSer
about 16 years ago
Posts: 158
Member since: Feb 2009
Didn't I hear that treasuries went higher today as a result of the jobs report.
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Response by The_President
about 16 years ago
Posts: 2412
Member since: Jun 2009
The Fed has already indicated that they will not raise rates before the end of 2010. And the only reason the job numbers are so good is because of seasonal hiing by retail stores. I'm sure the Fed knows this and I doubt they are having a party.
Dec. 4 (Bloomberg) -- Traders increased wagers that the Federal Reserve will begin lifting its target rate for overnight loans next year after the U.S. government reported a smaller- than-estimated decrease in jobs last month.
Federal-funds futures contracts on the Chicago Board of Trade show a 18 percent probability that the central bank will lift its target rate for overnight bank borrowing to at least 0.5 percent by March, up from 13.1 percent odds yesterday. For a similar increase at the June meeting of the Federal Open Market Committee, the probability rose to 52.9 percent from 43 percent yesterday.
Dec. 4 (Bloomberg) -- Treasury two-year notes fell the most since August after the U.S. economy lost fewer jobs than forecast last month, signaling the labor market is emerging from the worst slump in the post-World War II era.
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Response by Apt_Boy
about 16 years ago
Posts: 675
Member since: Apr 2008
NEW YORK (Dow Jones)--The dollar's rout of its major competitors gained momentum late Friday morning, as a strong U.S. jobs report triggered expectations U.S. interest rates could rise sooner than once thought.
Friday's jobs report nudged the Federal Reserve a little closer to the moment when it will raise interest rates.
A decision to raise interest rates is still likely to be at least several months away. But Fed officials are considering other steps they could take as they inch in that direction and they will likely debate them as early as their Dec. 15-16 meeting.
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Response by The_President
about 16 years ago
Posts: 2412
Member since: Jun 2009
wow, I guess people really are stupid. Does anyone besides me know that the ONLY reason the unemployment rate came down is because retail sotres added 350,000 TEMPORARY jobs that will disappear in January? Whoever thinks that the Fed will raise rates sooner than expected based entirely on today's job report truly does need their head examined.
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Response by Sunday
about 16 years ago
Posts: 1607
Member since: Sep 2009
For all these people talking about Fed raising rates because of the better than expected job report, I wonder what they think the unemployment rate will be for February 2010. Does anyone actually believe it will be better than 9%? How many actually believe that it will be even be better than the current 10%?
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Didn't I hear that treasuries went higher today as a result of the jobs report.
The Fed has already indicated that they will not raise rates before the end of 2010. And the only reason the job numbers are so good is because of seasonal hiing by retail stores. I'm sure the Fed knows this and I doubt they are having a party.
FAIL
http://www.bloomberg.com/apps/news?pid=20601009&sid=aHQdRb1X7tqg
http://www.bloomberg.com/apps/news?pid=20601009&sid=ad_zBGWCzdgo
Dec. 4 (Bloomberg) -- Traders increased wagers that the Federal Reserve will begin lifting its target rate for overnight loans next year after the U.S. government reported a smaller- than-estimated decrease in jobs last month.
Federal-funds futures contracts on the Chicago Board of Trade show a 18 percent probability that the central bank will lift its target rate for overnight bank borrowing to at least 0.5 percent by March, up from 13.1 percent odds yesterday. For a similar increase at the June meeting of the Federal Open Market Committee, the probability rose to 52.9 percent from 43 percent yesterday.
Dec. 4 (Bloomberg) -- Treasury two-year notes fell the most since August after the U.S. economy lost fewer jobs than forecast last month, signaling the labor market is emerging from the worst slump in the post-World War II era.
NEW YORK (Dow Jones)--The dollar's rout of its major competitors gained momentum late Friday morning, as a strong U.S. jobs report triggered expectations U.S. interest rates could rise sooner than once thought.
and this...
http://online.wsj.com/article/SB125995995923777183.html?mod=article-outset-box
DECEMBER 4, 2009, 10:32 P.M. ET.
Fed Gets Impetus to Move on Rates
Friday's jobs report nudged the Federal Reserve a little closer to the moment when it will raise interest rates.
A decision to raise interest rates is still likely to be at least several months away. But Fed officials are considering other steps they could take as they inch in that direction and they will likely debate them as early as their Dec. 15-16 meeting.
wow, I guess people really are stupid. Does anyone besides me know that the ONLY reason the unemployment rate came down is because retail sotres added 350,000 TEMPORARY jobs that will disappear in January? Whoever thinks that the Fed will raise rates sooner than expected based entirely on today's job report truly does need their head examined.
For all these people talking about Fed raising rates because of the better than expected job report, I wonder what they think the unemployment rate will be for February 2010. Does anyone actually believe it will be better than 9%? How many actually believe that it will be even be better than the current 10%?