Morning Report – Awaiting the FOMC 12/17/14

Posted on December 17, 2014 by Brent Nyitray

Markets are higher this morning on no real news. Bonds and MBS are down.

Oil continues to fall, with a barrel of West Texas Intermediate now down below $55 a barrel. This is putting pressure on prices. The Consumer Price Index fell .3% in November. Ex food and energy, it rose .1%. Will be interesting to see how the Fed addresses (if at all) falling energy prices in the FOMC statement.

Mortgage Applications fell 3.3% last week. Purchases were down 6.9% while refis were flat.

The FOMC will announce their decision at 2:00 pm. Expect volatility around that time and after as the press conference starts.

“A considerable time.” Sounds like a novel. Anyway, that is the phrase that will be the focus of the Fed statement. Will the Fed drop the language that states that rates will remain near zero for a “considerable time?” The new expected buzzword? Patience. Given how far bonds have moved to the upside already I don’t know how much a dovish statement will move them further. If anything the risks are on the downside.

Filed under: Morning Report | 4 Comments »