Daily Market Update 8/10/11

Mortgage rates moved lower Wednesday on the heals of yesterday's unprecedented Fed statement.  The Federal Open Market Committee said it "currently anticipates" that economic conditions "warrant exceptionally low levels for the federal funds rate at least through mid-2013".  Stocks, bonds, and mortgage-backed securities rallied on the news, although US stock markets fell sharply this morning on concerns about European banks.  The Fed has never before provided such an extended outlook for its monetary policy intentions, and this may be an indication that the Fed is running out of tools to stoke economic growth.  It also underscores the level of weakness in the economy as viewed by the Fed.  In the near term, it should bode well for mortgage rates, and may help boost the depressed real estate market.  No key economic data will be released today.  Results from today's 10-year Treasury auction will be released at 1:00 PM.