Stocks fell today, with the DOW retreating from a record, amid concern that the Federal Reserve could begin to taper its debt-buying program as the economy continues to improve. “We’ll have days when people are focusing on the positive economic story and days when people are focusing more on the issue that the Fed has in terms of slowing down their asset purchases and eventually moving interest rates,” Dan Curtin, the Boston-based global investment specialist at J.P. Morgan Private Bank said.
The dollar slumped today– falling 1 percent against a basket of currencies — as some investors believed its recent rally may have been overdone and as Treasury yields eased slightly from multi-month highs. “In absence of news, the primary thing that we’ve been trading off of for the last 48 hours has been U.S. Treasury yields,” said Boris Schlossberg, managing director of FX Strategy at BK Asset Management in New York.”As bond yields decline a little bit, there’s profit-taking,” he said.
Mortgage rates have risen sharply over the past few weeks on stronger economic data, which indicates that it may be too late for many homeowners to benefit from a refinance. This increase has happened just as thousands were gaining equity in their homes and finally becoming eligible for refinancing. “Rates rose in response to stronger economic data and an increasing chance that the Fed may soon begin to taper their asset purchases,” said the MBA’s Mike Fratantoni.