MBS opened down another 11 bps this morning.

A recent pickup in inflation isn’t likely to shift Federal Reserve policymakers’ forecasts for three interest-rate cuts this year and four in 2025, according to economists surveyed by Bloomberg News.

The Federal Open Market Committee will keep rates steady in the 5.25% to 5.5% range for a fifth consecutive meeting next week, with policymakers reducing rates for the first time in June, economists say. A solid majority of survey respondents see Fed officials penciling in three or more cuts in 2024, while more than a third expect two or fewer.

Fed Chair Jerome Powell and his colleagues will update their economic and rate projections at the March 19-20 meeting for the first time since December, and survey respondents expect only small tweaks to their outlook with no change in the projected rate path.

CPI has come and gone and things could certainly have been better and worse.  That said, it’s hard to make a case for a friendly rate breakout that doesn’t rely on new, downbeat econ data.  Risk/reward is not lower than it was heading into CPI, leaving options more open for both risk averse and risk tolerant clients.

We are starting to see more housing inventory for sale, according to the latest research from Realtor.com. New listings increased 15.8% year-over-year in the week ending March 9. Active inventory was up 21.7% compared to a year ago. The median listing price was down 0.6% compared to a year ago.

Industrial production rose 0.1% in February. January’s number was revised downward from a 0.1% decline to a 0.5% decline. Manufacturing production rose 0.8% while January was revised downward from a 0.5% decline to a 1.1% decline. Capacity Utilization was flat at 78.3%. January was revised downward from 78.5% to 78.3%.

NAR settles commission lawsuits for $418 million

The National Association of Realtors has agreed to pay $418 million in damages to settle the commission lawsuits. The story was first reported by the New York Times.

According to NAR, this settlement brings an end to all of the litigation claims brought by home sellers. In addition to the damages payment, the settlement also bans NAR from establishing any sort of rules that would allow a seller’s agent to set compensation for a buyer’s agent.

Additionally, all fields displaying broker compensation on MLSs must be eliminated and there is a blanket ban on the requirement that agents subscribe to MLSs in the first place in order to offer or accept compensation for their work.

For a short while this morning, it looked as if bonds would break up and over the recent 4.32+ ceiling in 10yr yields, but trading calmed down and trended sideways in a narrow range for the rest of the day.  It was a calm conclusion to what has otherwise been the most damaging week since October.  But don’t let the calm fool you.  It’s likely to be calm before the storm considering next week brings a new Fed dot plot for the first time since December 13th.

UMBS ended the day down 16 bps at 100.41