Rates could be in for wild ride in latter half of week

by MPA20 Aug 2013

The latter half of the week could see mortgage rate volatility as the market anxiously observes the outcome of Fed meetings, a leading bond analyst has said.

Last week, MBS sold off 182bps despite relatively flat economic data. In this week's MPA Weekly MBS Wrap, MBS Authority senior bond analyst Bryan McNee has said the week ahead could see even more volatility. But, like last week, the volatility is unlikely to be driven by economic data, McNee said.

"What will likely move mortgage rates this week will not be economic releases, but events," he said.

McNee pointed to the latter half of the week, with July's FOMC minutes due on Wednesday and the Federal Reserve convening for its Jackson Hole Symposium on Thursday.

"Thursday and Friday start the Jackson Hole, Wyo., Symposium. Traders will be focusing on who will be the next Federal Reserve chair in January, and what about the timing of the Fed taper?" McNee said.

Any speeches to come out of the symposium "could really shake the market", McNee indicated.

"Really look for some volatility Wednesday, Thursday and Friday as the market tries to be ahead of the next FOMC."

To see McNee's full analysis of the week ahead for MBS, CLICK HERE.


Should CFPB have more supervision over credit agencies?