The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 3 to 3-1/4 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve's Balance Sheet that were issued in May. The Committee is strongly committed to returning inflation to its 2 percent objective.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
Sounds like spreads at 300bps+ on agency debt are here to stay
Yes but that was predicted, the move that was surprising was the indication of 125 over the last two meetings of 2022 indicating benchmark rate of 4.4% BYE and 4.6% by Q12023. Multiple desks indicated from their Econ team and backed by the DOT plot that the rates wouldn't be decreased at least till 2024 and then it would be in slow increments.
It's crazy two weeks ago 75bps was out of the question on many desks and today on BBG a couple called for 100bps as a way to finally shock the market into action.
I wonder how people are seeing Agency quoting. We only have the real big players asking for quotes. Smaller shops and Equity groups have stopped even inquiring unless they are required to Refi.
Getting deals done at around 175 over w/ credit exceptions (full-term IO @ 1.25 DCR / half-term IO @ 1.20 DCR). agencies are not going to hit their caps and will get aggressive for the right business. Not sure where the idea of 300 over is coming from.
Same - On the multifamily side we're seeing 175-200 over with most of our lenders and as low as 160-165 for some of the balance sheet lenders that are trying to compete, although they tend to be more conservative on the leverage side. With that said, definitely not as nice of an environment as last year. Seems like a lot of my brokers are bored as hell
oops should of read the last line, yea we are seeing Credit spreads sub 200 on MF side. Maybe they meant PTR. Usually we get around 160-185. 160 on the highly affordable deals. The Credit Spread + MBS we are above 200. I'd love to know what people are getting for their credit spreads.
Sorry just looking to make sure I am interpreting this correctly CPMA's15 - Are you saying that in today's meeting Powell indicated they would be decreasing rates sooner than they had expected? I thought the dot plot I saw in one of today's articles reinforced their position of slowly decreasing, beginning in 2024
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