9/22/09

For economic news yesterday we had the Conference Board’s Leading Economic Indicators. Once again, we had a number that shows that the economy’s fall has either turned around or at least stopped – forget all those out-of-work people, or the “For Rent” signs on Main Street. LEI was +.6% after also being up in July and June, and in fact has risen since April after being negative since the summer of 2007. But we also have the Fed continuing to buy Treasuries and mortgage-backed securities – programs that most analysts believe will be gently scaled back as investor interest creeps back into the secondary markets. But both stocks and bonds ended up the day on a down-note, with a few investors even changing prices for the worse. The question for mortgage rates, and rates in general, is how much more money will be pulled out of the bond market and put into stocks? Currently, mortgages are “worse a tad”.
The FOMC meeting begins this morning; a two day meeting, as all are these days, tomorrow at 2:15 we get the policy statement. No increases in rates, what the group thinks about the recovery and comments on unemployment are likely the key concerns.