The Daily Advisor: March 27, 2024
Three Things To Know Today
1. 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.
2. Increased Funding Available for DPP® Program
To further support housing affordability, FHLBank Chicago is increasing the
maximum per member limit available for its Downpayment Plus® (DPP) grant program
to $1 million per member. The increment represents a nearly 43% increase over
the 2023 limit of $700,000.
3. Join Tomorrow’s Institutional Insights Webinar – Invest in Your Community!
On March 28, we’re joined by FHLBank Chicago Community Investment Officer, Katie Naftzger, to talk about enhancements to our Community Investment programs in 2024, the positive impact you can make in the communities you serve with FHLBank Chicago support, and answer questions about our Community Investment programs.
Market Commentary
Treasuries rallied and equities finished the day lower after durable goods orders rebounded in February, pointing to a resilient U.S. economy. Yields began the day with slight gains across the curve and returned treasuries to the prior day's opening levels, but the market quickly declined from the highs. All tenors climbed off their lows in mid-morning action, and the bounce continued into late trade with the five-year and longer yields reaching fresh highs ahead of the close. The markets are currently forecasting the Federal Reserve (Fed) to cut about 78 basis points (bps) by December.
Durable goods rose by 1.4% month-over-month in February, above consensus expectations of 1.1%. Orders increased for transportation (+3.3%), namely for motor vehicles, machinery, and fabricated metal products. Excluding transportation, new orders increased 0.5%, and excluding defense new orders increased 2.2%.
The House Price Index went down 0.1% in January, the first decrease since August 2022. For the nine census divisions, monthly price changes ranged from -0.6% in the South Atlantic division to +1.5% in the West North Central division. Year-over-year house prices increased 6.3% for the same reporting period - in line with the historical average.