The FOMC and the Mortgage Market
42 Pages Posted: 7 May 2019
Date Written: March 19, 2019
Using daily data on mortgage applications from over two decades, this paper shows that applications increase sharply in the days just before the Federal Open Market Committee (FOMC) meetings, and decline sharply in the days after the FOMC. Bond market uncertainty also increases in the days before these meetings. And the evidence shows that this increase in bond market uncertainty helps explain the rise in applications, as risk averse households rush to contract ahead of the meeting, rather than gamble on interest rate outcomes after the FOMC meeting.
Keywords: Monetary Policy, FOMC, Uncertainty, Housing Market, Mortgage Application
JEL Classification: E52, E58, G21
Suggested Citation: Suggested Citation