Markets will be focused on FOMC today

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Published Date 12/14/2022

No news this morning that interests traders or investors. This afternoon at 2 pm ET the FOMC policy statement, the Fed’s quarterly outlook for the next two years, and at 2:30 pm Jerome Powell’s press conference.

If there is anything a given coming from the Fed, it’s that the Fed will increase the FF rate 50 bps and then slow the increases in 2023. How slow will depend on wage growth and economic conditions. Inflation of prices is decreasing but it is wages that will be the dominant focus in 2023. The 50 bp increase is totally discounted in current rate levels.

Not much movement this morning, the 10 yr. unchanged at 9 am and MBSs -9 bps.

MBA mortgage applications better last week with rates stabilizing. The composite index +3.2%, purchase apps +4.0% and re-finance apps +2.8%. The survey uses responses from mortgage bankers, commercial banks, and thrifts. The data cover more than 75% of all retail residential mortgage applications in the US.

Nov import and export prices continue to increase but less than forecasts. Imports yr./yr. 2.7% from 4.1% in October. Export prices yr./yr. +6.3% from 7.4%.

At 9:30 am the DJIA opened +33, NASDAQ -6, S&P +3. 10 yr. note 3.51% unch. FNMA 5.5 30 yr. coupon -6 bps but 31 bps better than 9:30 am yesterday.

Source: TBWS

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