Morning Report: Janet Yellen testifies in front of the Senate

Vital Statistics:


  Last Change
S&P futures 3813 24.3
Oil (WTI) 53.64 0.64
10 year government bond yield   1.10%
30 year fixed rate mortgage   2.86%

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


The MBA reported that mortgage loans in forbearance fell 5.37% compared to 5.46% a week ago. Fannie and Fred loans in forbearance fell to 3.13%, an improvement of 6 basis points. “The week of January 10 saw the largest – and only the second – decrease in the share of loans in forbearance in nine weeks, with declines across almost every tracked loan category,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “The rate of exits from forbearance has picked up a bit over the past two weeks but remains much lower than what was seen in October and early November.”


The FHFA has extended its foreclosure moratorium until Feb 28. The FHFA projects the COVID-19 foreclosure moratorium and its extension will create an additional $1.4 to $2 billion in expenses for the government-sponsored enterprises.


Mortgage Applications decreased 1.9% last week according to the MBA. Purchases increased 3%, while refinances fell 5%. “Market expectations of a larger than anticipated fiscal relief package, which is expected to further boost economic growth and lower unemployment, have driven Treasury yields higher the last two weeks,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “After a post-holiday surge of refinances, higher rates chipped away at demand. There was a 5 percent drop in refinance activity, driven by a 13.5 percent pullback in government refinances.”


Janet Yellen testified yesterday in front of the Senate Finance Committee. Here were the big takeaways:

  • Higher taxes are coming, but not now.
  • The government needs to get spending under control, but not now.
  • The dollar should be strong
  • Fiscal stimulus needs to be big.

23 Responses

  1. Did you notice the place given to Sen. Roy Blunt, R, MO?

    I cannot say I am surprised that an R Senator made an appearance for JB, but I can say having one as an MC was refreshing.


    • According to the media it is now traitorous to boycott an inauguration. Apparently doing so makes the transfer of power illegitimate.


    • Mark:

      I cannot say I am surprised that an R Senator made an appearance for JB, but I can say having one as an MC was refreshing.

      I am not surprised either…R’s generally do not possess the discipline of D’s when it comes to maintaining partisan rancor in order to destroy their political opponents. It is one of the basic weaknesses of conservatism, and a reason why progressivism dominates the culture.


    • It’s interesting that none of them have the self awareness to see that the embrace of celebrity culture that’s now tied to the Democratic inaugurations has a down side.


      • This would have been a good year to choose only uniformed entertainment like the Naval Academy choir for the patriotic songs. Not that the celebrities did a poor job, they did well. But your point is well taken.


      • not that i watched, but what is the downside? the democrats are the culture party


        • Agreed, how does it hurt them?


        • If the object is to pick up votes in Ohio, Iowa, NC, and FL or even to get closer in TX [all of which are doable reaches for Ds] more country musicians and more military choirs would be well advised. They aren’t losing Boston, NYC, or SF or Hollywood if they go all military, bluegrass, and country.

          But all this is around the margins. Who watches this stuff beside hermits like me? I used to have a normal work day and never would have seen any of this.


        • I still think it’s irrelevant if one is trying to attract working class voters. What might resonate is a parade of manufacturers telling Americans about jobs they’re bringing back home due to Biden’s economic plans along with “scientists” saying that mass quarantines are breathtakingly moronic, will kill more people than the virus and that people in a position to enforce them should be criminally prosecuted.

          But ultimately, if you have suburban white women and the rich on your side, who else do you need?


        • ideally suburban white women would care about their sons, but that isn’t a given…


    • LOL, I think it’s because he is Chairman of the Joint Congressional Committee on Inaugural Ceremonies,


      • That is why it was Blunt, rather than another R, but I do not think an opposing party JCC Chair has ever done this before. YMMV.


  2. From the Toronto Star:

    5:54 p.m.: One of President Joe Biden’s first acts upon taking office was to cancel the permit for the Keystone XL pipeline, the long-debated project to transport crude from Canada’s oil sands to the United States.

    But Prime Minister Justin Trudeau and elected officials in Alberta, the Canadian province where the pipeline originates, are not giving up so fast.

    The nearly 1,200-mile Keystone XL was intended to carry crude oil from Canada to Nebraska, where it would connect with an existing network to deliver the crude to refineries on the Gulf of Mexico.

    In canceling the pipeline, Biden took some of his first steps toward reversing the legacy of the Trump administration, which revived the project after it was rejected by President Barack Obama in 2015.

    Trudeau has long supported the pipeline as part of his effort to balance his priority to fight climate change with supporting Canada’s energy industry in Alberta and in other western provinces.
    President Joe Biden and Vice President Kamala Harris participate in a wreath laying ceremony at the Tomb of the Unknown Soldier at Arlington National Cemetery in Arlington, Va., on Wednesday, Jan. 20, 2021.

    Even before Biden’s announcement, the premier of Alberta sent out a statement saying he was going to object to it, and vowing legal action.

    “This is about more than just Keystone XL,” said the premier, Jason Kenney, an often fierce Conservative critic of Trudeau’s Liberal government. “This is about the Canada-U.S. relationship, this is about tens of thousands of jobs here, this is about billions of dollars of revenue for governments to pay for things like health care.”


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