FNMA 4.5% Down 19 bps... There is a fair amount of anticipation with all the t-notes being auctioned off next week and as below: fear of inflation/depreciating dollar.
We have seen some inflation indicators creeping up so there is talk of raising the fed funds rate to control that. It is not the raising of the fed funds rate that will bring up the rates...but the REASON they are doing it.
Remember inflation is bad for stocks and bonds...because inflation = lower valued dollar. If it takes more dollars to buy the same amount of goods...that is "'inflation". If there are things that indicate CONTINUED inflation...that means people with US dollars essentially OWN an investment that is depreciating.
Money is safer during that type of environment invested in things that go UP in value WITH inflation. Treasury Inflation Protected Securities or TIPS are one avenue, commodities are another. Stocks and bonds...more specifically investments that provide a fixed dividend tend to suffer.
Example: if you get 100 dollars monthly...and that 100 dollars is not buying as many goods due to inflation: you would be inclined to invest in something that would give you more income as inflation affects your buying power.
Dow is DOWN about 100 points...despite the 160+ companies reporting better than expected earnings for quarter three. Hang on!
$8000 dollar tax credit? Going forward MOST lenders are having borrowers sign a disclosure stating that they MAY NOT meet the closing date of 11/30 for the tax credit. This is simply a bit of "butt covering" by institutions (including us at Met!). We are still providing streamlined processes and doing our absolute best to get our loans out on time. Just know that you will be encountering questions if you haven't seen them already.
Hav a great weekend!
Chad
