Morning Report – Welcome Janet and Mel

Posted on January 7, 2014 by Brent Nyitray

Vital Statistics:

 

S&P Futures  1827.6 6.9 0.38%
Eurostoxx Index 3094.6 25.4 0.83%
Oil (WTI) 93.82 0.4 0.42%
LIBOR 0.242 0.003 1.15%
US Dollar Index (DXY) 80.7 0.051 0.06%
10 Year Govt Bond Yield 2.95% -0.01%  
Current Coupon Ginnie Mae TBA 104.3 0.0
Current Coupon Fannie Mae TBA 103.3 -0.5
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.53

Markets are higher this morning on no real news. The trade gap narrowed on lower oil imports. Bonds and MBS are up small.

3 days to QM…

Janet Yellen was sworn in as the next Federal Reserve Chairman. She will officially take office Feb 1, and is tasked with slowly extricating the Fed’s footprint from the economy and bringing its balance sheet back to historical normal levels. Note that the vote was actually closer than the Bernank’s (56-26) reflecting the political polarization happening in Washington and the Fed.

Mel Watt was sworn in as FHFA Director yesterday. In a statement issued by FHFA Watt said, “I am honored to serve as Director of the Federal Housing Finance Agency. Today’s housing finance system is one of the keys to our economic recovery and I am grateful for the opportunity to help develop a strong foundation for moving this system forward for the benefit of all Americans at this critical point in our nation’s history.” You can read the “for the benefit of all Americans” to mean that he is going to target lower income lending. Mel is a CRA guy to the bone.

The fight over unemployment extension seems to boil down over whether to pay for it or not. Democrats are against setting the precedent that extended unemployment benefits be “paid for” and are at the point where they believe no more non-defense spending can be cut. Republicans are coalescing around the “extend benefits, but find some other spending to cut” position.

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