Sifting Through Ashes For Seeds Of Hope - MortgageNewsDaily

[Robin Simon]

Good/interesting article from Mortgage News Daily that came out on Friday - sharing, lots of good tidbits about mortgage backed security bonds, the rate environment and where we may go from here

https://www.mortgagenewsdaily....

All that to say the market was ready for any indication that the Fed is getting close to leveling off the pace of its rate hikes. A short while later, such notions were forcefully validated by actual comments from the Fed's Mary Daly, who said several things that markets had been waiting to hear. The following bullet points paraphrase those comments:

• We want to avoid an unforced downturn by overtightening
• If we wait to see lagging variables like unemployment and inflation return to a steady state, we could easily overtighten
• We are starting to see the economy slowing
• We are now in a stage where we need to be thoughtful
• A slower pace of rate hikes should be considered at this point

All of the above is very important because it suggests the sentiment exists among Fed members to begin to consider a rate-friendly shift in monetary policy. To be sure, this by no means suggests and easy victory or quick return to lower rates. It also wouldn't lessen the importance of economic data in confirming that inflation isn't getting any higher. But it's one small step in the right direction--one small seed of hope in the ashes of the housing and mortgage market in the 2nd half of 2022.