Morning Report: Fed “halfway there” in terms of rate hikes 8/21/17

Vital Statistics:

Last Change
S&P Futures 2426.8 0.0
Eurostoxx Index 374.1 -0.1
Oil (WTI) 48.7 0.1
US dollar index 86.1 0.0
10 Year Govt Bond Yield 2.18%
Current Coupon Fannie Mae TBA 103.09
Current Coupon Ginnie Mae TBA 103.97
30 Year Fixed Rate Mortgage 3.88

Stocks are flat this morning on no real news. Bonds and MBS are flat as well.

Very slow news day, as the chatter relates primarily to the eclipse today.

The Chicago Fed National Activity index slipped a bit in July, indicating the economy is growing more or less on its historical trend line. Employment-related indicators were a plus, while consumption related indicators were a drag.

Not a lot of data this week, but there will be a conference of central bankers at Jackson Hole this week. The subject will be focused on regulation and financial stability so I don’t expect much in the way of market moving data. Janet Yellen will speak on Friday.

San Francisco Fed President John Williams says the “normal” Fed Funds rate should be about 2.5% or so. In other words, we are about halfway there. To put that number in perspective, it used to be in the 5% to 6% range before the financial crisis.

As we head into September, the debt ceiling fight will take center stage. This has usually been a contentious issue and this time should be no different. Nancy Pelosi is rumored to be demanding some sort of censure for Trump regarding his Charlottesville comments as the price of Democratic Party support. If so, this one could go down to the wire. Remember the last time we had a government shutdown, we were unable to get tax transcripts from the IRS for a couple of weeks. Take this into account and order before the debt ceiling deadline if you can.

The NY Fed bumped up its estimate for Q3 GDP to 2.1% from 2%. Note the Atlanta Fed is forecasting 3.7% GDP growth. Industrial metals have been on a tear, which is a tell for global growth.

Nationstar is now officially Mr. Cooper.

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