FOMC

Federal Reserve officials held interest rates near zero while signaling they expect two increases by the end of 2023, pulling forward the date of liftoff and projecting a faster-than-anticipated pace of tightening as the economy recovers.

And there are some brawls on the field affecting the direction of business for the rest of this year.

When new lending volumes start to recede, even with the FOMC’s actions, the shoals of credit and operational risk lurking just beneath the surface will emerge, columnist and analyst Chris Whalen says.

How we resolve millions of delinquent mortgages due to COVID is the only question that matters.

The central bank said it would keep interest rates at current levels through at least to help the U.S. economy recover from the coronavirus pandemic.

The only rational strategy for holding MSRs is to be very aggressive on protecting the servicing assets via loan recapture. This is one of the chief reasons that banks have been willing to give up their share in lending and servicing as they collapse back to retail-only lending strategies.

This proposed Libor replacement is an imaginary, backward-looking benchmark dreamed up by the economists at the Fed with no discernible market.

Any intention that Ginnie Mae may have had to slow prepayment rates by changing the rules on RPLs seems to be thwarted by the grim economic reality facing the big banks.

FHFA, HUD and Ginnie Mae should let the rate of prepayments on MBS dictate bond prices and market rates.

The Federal Reserve pledged to maintain at least the current pace of asset purchases and projected interest rates will remain near zero through 2022, as Chairman Jerome Powell committed the central bank to using all its tools to help the economy recover from the coronavirus.