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The Fed keeps the punch bowl around a little longer

Brent Nyitray, CFA, MBA

Realist real estate roundup, September 16–20 (Part 1 of 7)

Why follow the weekly Realist real estate roundup?

The weekly Realist real estate roundup is a summary of real estate–related trading and economics.

The roundup is a weekly series in which we discuss the week’s trading in government bonds and TBA (To-Be-Announced) mortgage-backed securities. We’ll see where mortgage rates have been and we’ll go over the weekly economic data and earnings announcements. Then we’ll look forward to what’s coming up the following week. The information in this series will be relevant to mortgage REITs like American Capital Agency (AGNC), Annaly (NLY), Hatteras (HTS), Capstead (CMO), MFA Financial (MFA), and people who invest in homebuilders.

Last week was all about the FOMC meeting

The ten-year bond rallied during the week, with the yield falling to 2.73%. The markets were expecting some sort of reduction in asset purchases and were caught off guard when the Fed decided to stand pat. The bond market also caught a bid when Larry Summers withdrew his name for consideration as the next Federal Reserve Chairman. Summers was viewed as more skeptical of the effects of quantitative easing than Janet Yellen, who is more or less a lock for the nomination now.

We also had some industrial data, which showed that things are improving, albeit modestly, in the manufacturing sector. But last week was all about the Fed.

In upcoming parts of this series, we’ll look at trading in the TBA market (which is the basis for mortgage rates), see where mortgage rates have been for the week, and then discuss past and upcoming economic data.

Continue to Part 2

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