FOMC

Mortgage rates fell to their lowest level since Freddie Mac started reporting this data in 1971, as the coronavirus shutdown continued to play havoc with the economy.

A number of proposals have been floated for debt payment holidays and other types of moratoria, but such approaches offer solutions that are worse than the problems.

Mortgage prices rose and spreads tightened Monday morning as investors responded favorably to the Federal Reserve's weekend announcement that it will resume net purchases of agency MBS for the first time since October 2014.

The Federal Open Market Committee lowered the fed funds rate target to between zero and ¼% in an emergency meeting on Sunday, but while analysts say the move was needed, they feel it will take more to offset the effects of COVID-19.

Increased refinancing volume led Fannie Mae to raise its 2020 estimate by $300 billion and 2021 projection by $280 billion.

Capacity constraints among mortgage lenders are leading to wider spreads between mortgages and the 10-year Treasury yield even after it remained below 1% for an extended period this week.

Mortgage rates hit their lowest point since Freddie Mac began tracking this data in 1971, as the 10-year Treasury yield fell below 1% after the Federal Open Market Committee's surprise short-term rate cut.

Investors' purchases of 10-year Treasurys after the Fed's 50 basis point short-term rate cut drove the yield below 1% for a period of time.

The Federal Reserve has voted unanimously to cut the interest rate 50 basis points to 1.10% effective March 4, in the first emergency rate cut since 2008.

The Federal Open Market Committee cut the fed funds rate target 50 basis points to a range between 1% and 1.25%, it announced Tuesday.