All global financial markets have experienced max volatility as the novel coronavirus has reached pandemic levels. This has increased the odds of a global recession. U.S. government bonds sold off on Thursday as investors fled to cash. The market rebounded on Friday afternoon as a response to the White House’s declaration of the outbreak as a national disaster. We hope with this announcement can institute responses that will start to get ahead of this disease.
Economic data is not relevant at the moment. However, the U.S. economy was in a good place prior to this pandemic so the hope is that the economy will recover once the virus has abated. In addition to the White House declaring this a national emergency, the Fed and Congress will be pumping in fiscal and monetary stimuli at unprecedented levels to help ease the blow to business and individuals affected by the virus.
On the lending front, our lending sources are operational, have contingency plans in place, and are actively working on both purchase and refinance transactions. Interest rates are at historical lows which is important for those looking to buy a home or refinance debt. It is worth noting that the 10-year Treasury has moved from a low of under .500% to back near 1%. This is actually a positive as rates going to zero would be problematic for our nation’s banks and for the insurance companies which collectively finance our debt.