Morning Report: The Fed takes down their rate forecast

Vital Statistics:

	Last	Change	Percent
S&P Futures	2049	-24.2	0.88%
Eurostoxx Index	3271	33.0	1.03%
Oil (WTI)	34.91	-0.58	-1.76%
LIBOR	0.532	0.006	1.13%
US Dollar Index (DXY)	97.77	-0.165	-0.17%
10 Year Govt Bond Yield	2.24%	-0.05%
Current Coupon Ginnie Mae TBA	104.2
Current Coupon Fannie Mae TBA	103.4
BankRate 30 Year Fixed Rate Mortgage	3.93

Stocks are lower this morning, reversing the post FOMC rally. Bonds and MBS are up.

As expected, the Fed rose the Fed Funds target rate by 25 basis points. The statement generally focused on how the economy has improved. The biggest surprise in the statement and the projection materials was the forecast for rates going forward. The Fed lowered their expected Fed Funds range going forward. You can see the September versus December dot graphs below:

In the projection materials, they took up their forecast for 2016 GDP up a hair and took down their estimate for 2016 unemployment by a tick. 

In response to the rate hike, banks hiked their prime rate to 3.5% from 3.25%. A lot of consumer debt, especially credit cards, are tied to the prime rate, which means consumers will feel the pinch. 

The Philthy Fed Manufacturing Index fell to-5.9 from 1.9. while initial jobless claims fell from 282,000 to 271,000. 

The Bloomberg Consumer Comfort Index rose to 40.9 from 40.1.

The Index of Leading Economic indicators fell from 0.6% to 0.4%. 

The nail that sticks up gets hammered down.

The FHFA is taking more steps to push lenders to provide financing to more multi-fam properties.