MBA Mortgage Applications, for the week ended February 20th, fell -3.5% after falling -13.2% the week before. Purchases rose +4.6% vs. -7.1% prior (-1.5% YoY), Refinancing fell -7.5% vs. -16.0% prior (+15% YoY), and the average interest rate for a conventional 30-Year loan rose to 3.99% vs. 3.93% prior (4.53% a year ago). While Home Sales for the month of January were expected to decline following the prior month's jump, sales fell much less than consensus. New Home Sales slipped -0.2% (consensus -2.3%) following January's +11.6% advance.
Yesterday during her testimony with the Senate Janet Yellen reaffirmed the Fed's view that the economy continues to improve, however we still have a long way to go. She assured leaders that the Fed would remain accommodating until they see continued strength in the data and had reasonable confidence that the U.S. will be able to move back to their 2% annual inflation objective. It was the general consensus that providing the public with a Fed that is transparent in its guidance is essential to Market stability. As a whole the statement portrayed a dovish Fed, willing to keep rates low and provide support to the market as long as they do not see clear signs of reaching their objectives. Treasuries got a boost yesterday following Yellen's dovish remarks pushing 10-Year yields back below the 2% mark, and today the bondmarket continues to maintain yesterday's closing levels with 10-Year notes hovering just below 2%. The curve has bull flattened with 2s10s down -1.6 bps.
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