Inflation was back in the news today. Fed member Frederic Mishkin appeared on CNBC this morning stating that inflation could come to the forefront given all of the government programs. The news is keeping Mortgage Bond prices near unchanged levels.
The Federal Reserve Bank of New York reported they purchased $19B in mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae between January 15 and January 21, bringing its total purchases so far up to $52.6B, or around just 10% of their $500B commitment through the end of June. The program was instituted to shore up the slumping housing market.
For today, I am currently recommending floating as support seems to be holding just below where Mortgage Bonds are trading. With the Fed still buying Mortgage Backed Securities there is a potential that home loan rates could improve in the near term.
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