| Last | Change | Percent | |
| S&P Futures | 1456.8 | 6.4 | 0.44% |
| Eurostoxx Index | 2592.6 | 49.3 | 1.94% |
| Oil (WTI) | 99.66 | 1.3 | 1.37% |
| LIBOR | 0.385 | -0.004 | -0.90% |
| US Dollar Index (DXY) | 78.9 | -0.366 | -0.46% |
| 10 Year Govt Bond Yield | 1.82% | 0.10% | |
| RPX Composite Real Estate Index | 193.7 | 0.3 |
Welcome to the world of QEU (QE Unlimited). Markets worldwide rocketed on the Fed's decision and the rally continues this morning. Commodities have a bid, while bonds and down a point and MBS are flat, continuing the divergence that began on the announcement.
In economic data, the Consumer Price Index (which became officially irrelevant yesterday) came in at +.6% and retail sales data came in a little better than expected, though higher gas prices may have been driving that number. The dollar continued to weaken against the euro.
The Fed's announcement had opposite effects on Treasuries and MBS. Treasuries sold off 2 points on the announcement, while MBS gained a point. While Treasuries did recoup some of their losses, MBS went out at the highs of the day. This puts the 30 year Fixed Best-Ex rate somewhere between 3 3/8% and 3 1/2%. The NY Fed has the particulars on the MBS purchases.
Former Fed Governor Kevin Warsh told CNBC that the Fed's action reflects deep concerns that the economy is at stall speed or worse. He also noted that the iPhone 5 would have more of an effect on the economy than QE. Someone else made the same point, and took it further by saying if you believe that incremental consumer spending is good for the economy then you must support the New Deal II.
The FHFA is developing a new securitization platform as a way to let other lenders compete with Fan and Fred in the secondary market and to reduce the GSEs role in the mortgage markets overall.
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