Phil Grossfield's Blog


Monthly Archives: March 2015

Fed Meets Today – Oathkeeper Jaime Lannister of Game of Thrones

The 30-year Fannie Mae bond is +6bps since yesterday’s close.  Generally a lender’s pricing improves when the bond is being bought.

Today the Fed will reveal a statement and everyone will be paying close attention to whether the Fed intends to raise interest rates sooner or later.  Everyone agrees the Fed will pull the trigger eventually…but when?  And when they reveal their plan, how will the markets react?  Will investors invest or sell off bonds? stocks? both? neither?

I’ve read/discussed varying opinions on what the Fed might do…seems most think the Fed will hold off for a couple of more months and will use language to make that clear.  MBS Highway is looking for a specific word, “patience.”  it’s their opinion

that if the mere word is used in the Fed’s statement it will mean we will see at least 3 more months of unchanged monetary policy but if they omit the word things could change instantly.    Who knows…maybe their right…they do a pretty good job of predicting these sorts of things.

However, I feel that what they say today will have no impact on what they say next month. It’s not like their words are an oath worthy of Jaime Lannister from Game Of Thrones. What they say tomorrow may completely contradict what they say next month. I wish I could advise which way rates are likely to swing this afternoon…I usually give my opinion, but I sincerely have no idea. In fact, even if I knew what they were going to say, I’m not certain how the markets would react. It’s a typical wait-and-see situation…

My Wife At The Oval Office

My Wife At The Oval Office.  My wife was honored last week with a trip to Washington D.C. and a tour of the West Wing including a look at the Oval Office.  Not many get this honor…it’s kind of a big deal.

Colleen, better known as the Travel Mama, has a blog and published book on how to travel with children and stay sane.  Her influence has awarded our family travel all over the world.  But imagine our excitement when the White House called Colleen to attend a summit as one of the 100 most influential travel bloggers and digital media. The summit was on Study Abroad and Global Exchange…I guess travel bloggers and the media in general are a good resource for experts on the subject.  BUT WAIT, THERE’S MORE!  At the end of the summit they announced that 6 out of the 100 attendees would be called back, an honor for their influence, and guess who had that honor…go ahead, guess!  Yup.  And, not only was Colleen honored to be brought back, but she was awarded the ability to honor her father by bringing him too.  The extent of pride I have for my wife is beyond expression.  And you have to admit, she looks pretty damn good pointing to the cameras.  

Spock; Jobs Report Friday

Spock.   I’m a self-proclaimed science fiction geek.  If you’ve been reading my posts for a while, then you probably already know this to be true.  But what you may not have known is that I have a special love for all things Star Trek.  Furthermore, my admiration for Spock, or Lenard Nimoy if you please, is right up there with my all-time favorites.  I will no doubt be writing more about this…for now I haven’t the time to adequately express the loss.


My Market Update – 03/03/2015

Bonds Down -2bps.  The 30-year Fannie Mae bond is down -2bps since yesterday’s close.  Generally a lender’s pricing worsens when the bond is being sold off.

Today should be quiet after yesterday’s NASDAQ victory.  Friday is the all important Jobs Report.  The Jobs Report indicates how many new jobs were created in February.  The results change the way traders interpret the economy…either stronger or weaker…and in turn affect their buying and selling behavior with respect to stocks and bonds.  This week trading is only in anticipation of what the actual report will show.  But when Friday hits, a reaction could be dramatic depending on how far off expectations the actual numbers report.  Last month this report killed us and threw the bond market into the gutter for the entire month of February.  On Thursday I’ll have some better information to share…



Jobs Week; Michael Jordan Hits $1,000,000,000

Michael Jordan Joins Billionaire Club.   My favorite basketball player of all time…nobody can touch MJ…but it had nothing to do with money.  But now he adds his name to to the billionaire club by reaching the $1,000,000,000 bubble.  Here’s the article on CNN Money if you care to read it.  I wonder what leader list he’ll join next…

My Market Update – 03/02/2015

Bonds Down -31bps…Reprice Worsening Possible.  The 30-year Fannie Mae bond is down -31bps since Friday’s close.  Generally a lender’s pricing worsens when the bond is being sold off.

The stock market is performing well this morning and the NASDAQ has hit 5,000 which hasn’t happened in 15 years…this is the reason bonds are being sold off.  Typically traders either invest in bonds or stocks but rarely both.  Moreover, it’s a fair analysis that when traders are investing in stocks, they sell of bonds to free up capital.  When they sell of bonds, our rates/pricing get worse.  Similarly, when investors feel stocks are a bad bet, they sell them off and invest in safer bonds instead which helps our rates/pricing.  But today the former is the case and the latter is a but a dream.

Therefore, if you were planning on locking today, I’d lock in before a reprice for the worse.  If that has already occurred by the time you’ve read this section, then you should check with the bond market to see if there is a chance of further bond degradation, or, call or text me.

This morning’s boost is a confidence maker for the stock market because despite economic data that wasn’t exactly strong in terms of economic strength, the stock market performed well anyway.  This could be interpreted that investors are bully on stocks and that could mean trouble for the bond market this month.  This week is full of economic reports including the all important Jobs Report on Friday.  Last month this report killed us and threw the bond market into the gutter for the entire month of February.  I don’t have an angle on what we might expect just yet, but as I learn more I’ll share it with you. For now, we need to send some positive energy towards that Friday report because we need it if we’re to see any attractive rates in March…



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