Mortgage rates improved last week after a less hawkish than expected statement from the FOMC showed that bond markets were oversold heading into the meeting. Market participants quickly reversed positions after the statement revealed that FOMC members had not changed their forecast for future rate increases, surprising many Fed observers who had taken recent hawkish statements from several FOMC members as a sign that rate increases could accelerate. Prior to the statement, Fed Funds futures were trading at a 46% chance of an additional 2 changes this year, versus a 34% chance post statement.
The week ahead will have very little in the way of Economic releases for markets to focus on, with Existing Home Sales and New Home Sales being two potential market movers this week. There will be several Fed Speakers this week, starting today with Evans giving a speech on the Economy and Policy in New York. Other Fed speakers of note this week will be Yellen speaking at a community development conference on Thursday, with Kaplan also speaking on the economy in Chicago on Thursday. Bullard will also speak to the Economic Club of Memphis on Friday. There will be an 11 Bln 10 year TIPS auction on Thursday.
Economic Calendar for the week of 03/20/2017 to 03/24/2017:
Monday: Chicago Fed National Activity Index
Tuesday: Current Account Balance
Wednesday: MBA Mortgage Applications, FHFA House Price Index, Existing Home Sales
Thursday: Initial Jobless Claims, Continuing Claims, New Home Sales
Durable Goods Orders