WeeklyBasis 06/06/05: Fed Bankers Blab Before Greenspan Testimony

Rates/Commentary, for the week of June 6, 2005. 30-yr and ARM rates are down .125% from last week. And it wasn’t the dismal May jobs report that came out Friday as many might expect. It was comments from the new Dallas Federal Reserve Bank president Richard Fisher who said mid-week that the Fed’s June 30 meeting should produce the last of the .25% rate hikes. This will be corroborated – or not – this Thursday when Fed chairman Greenspan speaks before a Congressional committee on the state of the economy. As you know, Fed speak is as important as actual Fed rate intervention. And it’s very uncommon for Fed members to be as forthright as Fisher was because it shocks markets. But now the markets are already excited, so even when Greenspan provides his broad answers to specific rate outlook questions this Thursday, look for the markets to parse his language to the extreme. This means, rates could get a lot better (if that’s possible!) if he signals that rate hikes are almost over. Or rates could jump up if he tries to backpedal away from Fisher’s remarks. It’s too difficult to predict for now. But I will keep you posted.

Conforming ($200,000 – $359,650) – NO POINTS
30 Year: 5.5% (5.64% APR)
15 Year: 5.125% (5.265% APR)
5/1 ARM: 5.25% (5.40% APR)

Jumbo ($359,651 – $650,000) – NO POINTS
30 Year: 5.75% (5.89% APR)
15 Year: 5.375% (5.515% APR)
5/1 ARM: 5.125% (5.275% APR)