The Daily Advisor: March 29, 2024
Three Things To Know Today
1. Holiday Hours | Good Friday
In observance of Good Friday, FHLBank Chicago and the Mortgage Partnership Finance® (MPF®) Program have amended hours for today, March 29, 2024.
2. Navigating Your Balance Sheet in a Falling Rate Environment
In the wake of a tumultuous 2023 that featured the most aggressive rate hiking cycle in nearly 36 years, the economic outlook has started to shift - including a shift in the expected rate cuts and dot plot. In our latest white paper, we break down strategies for how you can manage your balance sheet in a falling rate environment.
3. Spring Pricing Special for Affordable and Sustainable Homeownership
To help alleviate some of these overall market pressures and improve housing affordability, we are offering a spring pricing special on certain low loan balance loans, which often support low and very low income borrowers or borrowers located in lower income areas.
Market Commentary
Treasuries were mixed and equities finished the day mostly higher after U.S. gross domestic product (GDP) data showed the economy grew by more than estimated in the final three months of 2023. The longer tenor outperformed from the start, but most bonds opened the day in negative territory. The entire curve bounced quickly after this morning's batch of data and continued into the late morning. In the final couple hours of the trading day, the session saw some renewed selling, but the long bond held onto its modest gain into the close. Traders are currently pricing in a 60% chance of a 25 basis point (bps) rate cut in the June Federal Open Market Committee (FOMC) meeting, according to the CME FedWatch tool.
The economy expanded by 3.4% in Q4 2023, above the consensus expectation of 3.2%. Consumer spending was revised higher to 3.3%, led by services growing 3.4% and goods increasing 3%. Non-residential investments were revised higher to an annualized growth rate of 3.7%. Residential investment continued to grow as well, rising by 2.8%. Government spending was up 4.6%, but both exports and imports increased less than initially reported. The GDP deflator increased 1.7% in the fourth quarter to a record high of 123.3 index points.