Happy Friday! I hope you have a great weekend and Labor Day!
Inflation rose in July at its fastest pace since February, driven mainly by tariffs. The increase matched forecasts but stayed above the Fed’s 2% goal, signaling ongoing price pressures. Even so, markets still expect another rate cut next month if the job market weakens further. Mortgage rates held mostly steady for the week.
Next week begins with markets closed for Labor Day and reopening Tuesday. While the calendar is light, important reports are due, including the ISM manufacturing index (a measure of factory growth or decline) and the government’s Employment Report. Both are closely watched ahead of the Fed’s September 16-17 meeting, especially since last month’s jobs data came in weaker than expected with major downward revisions.
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Hello, I hope all is well!
Fed Chair Powell’s Jackson Hole speech pushed mortgage rates lower, in line with market expectations after the weak August 1st jobs report. He suggested the labor market could be soft enough to allow a near-term rate cut despite uncertain inflation, sending rates on conventional ARMs, government loans, and jumbo programs to their lowest levels since October 3, 2024, while conventional fixed-rate programs remained mostly unchanged.
Next week features several economic reports, a few short-term Treasury auctions, and Fed speeches. The main focus will be a key report later in the week that the Fed uses to track inflation, which could influence their next policy move. The week begins with July’s New Home Sales report on Monday.
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Hey, I hope you have a great weekend!
Last week's U.S. economic news was a mix of different signals. The number of people applying for unemployment benefits went down a little, which suggests that the job market is still holding up. However, reports also showed that prices for producers — those who make and sell goods —unexpectedly rose, which could mean that the costs of tariffs are starting to get passed on. The stock market, however, seemed to mostly ignore this negative news and ended the week higher, with some major companies posting strong financial results. The overall mood among investors was influenced by the hope that the Federal Reserve would cut interest rates soon to help boost the economy. Remarkedly, interest rates ended the week virtually unchanged.
Next week will be pretty calm for the economy. There are a few regular reports coming out, but they aren't super important. What will probably get everyone's attention are two events concerning the Federal Reserve. On Wednesday, the Fed will release the notes from their last meeting, explaining why certain actions (or inactions) were taken. On Friday, Chairman Powell is giving a speech at a special meeting. What he says could give us hints about what the Fed will do next, and that's what people will be watching most closely.
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Last Updated: 8/15/25
Friday's bond market has opened in negative following mixed economic news. Stocks are fairly calm with the Dow up 87 points and the Nasdaq down 40 points. The bond market is currently down 3/32 (4.29%), which with yesterday's late losses should cause an increase in this morning's mortgage rates of approximately .125 of a discount point.
The first of this morning's three economic reports was July's Retail Sales report at 8:30 AM ET this morning. It revealed a 0.5% rise in consumer spending following June's upwardly revised 0.9% increase. If more costly and volatile auto transactions are excluded, sales rose 0.3%. Both headline numbers pegged forecasts, but both were also revised higher for June by 0.3%. These numbers mean consumers are continuing to spend money, fueling economic growth. They aren't strong enough to alter the likelihood of the Fed cutting key rates next month, but could play a role in the Fed's debate process by supporting the theory the economy is still strengthening despite tariffs and where key rates currently are. Cutting rates when the economy is growing on its own raises the threat of inflation flaring.
July's Industrial Production report was posted at 9:15 AM ET this morning, showing a 0.1% decline in output at U.S. factories, mines and utilities. This was a bit weaker than expected as market participants predicted production would be unchanged from June's level. Because this was just a minor variance in a moderately relevant report, the news had had little impact on this morning's trading.
Closing this week's calendar was August's preliminary version of the University of Michigan's Index of Consumer Sentiment at 10:00 AM ET. They announced a reading of 58.6 that was a decline from last month's 61.7 and well below forecasts of 62.2. The lower reading means surveyed consumers were less optimistic about their own financial and employment situations this month than last month. That is favorable news for bonds and mortgage rates because waning confidence usually translates into softer consumer spending numbers in the future.
Next week doesn't have any highly important data scheduled like some of this week's reports. There are only three monthly economic reports set for release and they are all considered to be moderately important at best. In addition to the data, we also have a Treasury auction that may come into play one afternoon. Likely to drive trading the most next week are a couple of Fed-related events, which include the release of the minutes from the last FOMC meeting Wednesday and a speech by Chairman Powell at the annual Fed Jackson Hole conference Friday. Monday has nothing of importance scheduled, leaving weekend headlines to influence rates as the week begins. Look for details on all of next week's activities in Sunday evening's weekly preview.
If I were considering financing/refinancing a home, I would....
Lock if my closing were taking place within 7 days... Lock if my closing were taking place between 8 and 20 days... Lock if my closing were taking place between 21 and 60 days... Lock if my closing were taking place over 60 days from now...
This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.*
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Hi! Hope you’ve had a great week and kept yourself busy!
This week has been mostly calm in the markets, following last Friday’s jobs report, which caused bond yields—and mortgage rates—to drop sharply. After that big move, things have settled down. Daily changes in the market haven’t been strong enough to cause any big shifts in mortgage rates. Overall, interest rates finished the week slightly lower.
Next week could bring a lot more changes in the markets. On Tuesday, the Consumer Price Index will give an important update on inflation and might show how new tariffs are affecting prices. Several Federal Reserve officials are also set to speak, which could give clues about whether last week’s weaker job report has made them more open to lowering interest rates. With these events, the quiet markets we saw this week might turn more unpredictable in the days to come.
Last Updated: 8/8/25
Friday's bond market has opened in negative territory again as concerns about upcoming hurdles in the bond market continue to grow. Stocks are posting early gains with the Dow up 217 points and the Nasdaq up 132 points. The bond market is currently down 6/32 (4.27%), which should cause an increase of approximately .125 - .250 of a discount point in this morning's mortgage rates. If you saw an intraday increase late yesterday, you should still see a slight increase this morning.
Yesterday's 30-year Treasury Note auction went poorly with the benchmarks signaling another lackluster demand for the securities, particularly from international buyers. This follows similar results in Wednesday's 10-year Note sale and means investor appetite for long-term debt is waning. That is problematic for the bond market and mortgage rates since rates are based on long-term bonds. Unsurprisingly, the results caused a negative reaction in the bond market after the 1:00 PM ET announcement. It was enough of a move for some lenders to revise pricing slightly higher before closing, but most lenders will likely reflect that loss in this morning's rates.
There is no relevant economic data scheduled for today. St. Louis Fed President Alberto Musalem is speaking at 10:00 AM but the topic of his speech is related to banking and small business, not monetary policy or the economy. However, there is a chance of getting a related question in the Q&A part of the event. What traders are more interested in is tomorrow's speech by Fed Vice Chair Bowman in Colorado Springs. The topic of her speech is listed as Economic Outlook and Community Banking, meaning there is a much better chance of hearing something that could drive bond trading Monday morning.
Next week has three major reports scheduled that may heavily influence the financial and mortgage markets. We will get key inflation indexes Tuesday and Thursday morning, followed by consumer spending data Friday. There are also a few other less important reports that can also contribute to movement in rates. The week starts light with nothing set for Monday except maybe a reaction to Saturday's Fed speech. Look for details on all of next week's activities in Sunday evening's weekly preview.
If I were considering financing/refinancing a home, I would...
This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
It’s hard to believe it’s already August—this year is flying by! Hope you're having a great day!
This week, the U.S. economy sent mixed signals. GDP grew around 3% in the second quarter, but July’s jobs report stole the spotlight—only 73,000 jobs were added, and unemployment rose to 4.2%. The Fed kept rates unchanged, but for the first time in over 30 years, two Fed governors dissented, calling for a cut. After the weak jobs numbers, the chances of a September rate cut rose sharply. Mortgage rates held steady early in the week but dropped after the report, ending the week lower.
Next week has only a few economic reports, and none are as important as this week’s. Factory Orders come out Monday, but they likely won’t impact mortgage rates. There are also two midweek Treasury auctions that could affect rates. Now that the Fed meeting is over, we’ll also hear from several Fed officials throughout the week.
Last Updated: 8/1/25
Friday's bond market has opened sharply higher following this morning's employment news. Stocks were already set for a negative open due to President Trump's tariff announcement last night but have extended those losses after today's data. The Dow is now down 772 points while the Nasdaq has lost 543 points. The bond market is currently up 34/32 (4.23%), which should improve this morning's mortgage rates somewhere between .375 and .625 of a discount point.
The most influential of this morning's three economic reports was July's Employment report at 8:30 AM ET. It revealed the U.S. unemployment rate rose from June's 4.1% to 4.2% last month, as it was expected to do. The big news came in the payroll numbers. They showed only 73,000 new jobs were added to the economy, falling short of the 100,000 that was expected. Furthermore, June and May's payroll numbers were revised lower by a combined 258,000 jobs, indicating the economy had added far fewer over the past three months than analysts thought. As a clear sign of weakness in the employment sector, this data is extremely good news for bonds and mortgage rates. It also raises the chance of the Fed cutting key rates at September's FOMC meeting after it dropped following Wednesday's FOMC events.
The third headline number in the report was average hourly earnings that rose 0.3% for the month. This matched forecasts. However, year-over-year earnings rose 3.9% when analysts predicted 3.7%. Rising earnings fuel inflation by giving consumers more money to spend and causes businesses to pass on those costs to consumers in the prices of their products and services. Not that it shows in this morning's bond trading, but this portion of the report is bad news for bonds and mortgage pricing.
Next up was the release of July's manufacturing index from the Institute for Supply Management (ISM) at 10:00 AM ET. It also gave us favorable results with a reading of 48.0. This was a decline from June's 49.0 and well below forecasts of 49.5. The lower reading means fewer surveyed manufacturing executives felt business conditions improved during the month than did in June. Since this is a sign of a slowing manufacturing sector, the data is good news for rates.
The least influential of this morning's reports was July's revised University of Michigan Index of Consumer Sentiment, also late this morning. They announced a reading of 61.7 that was a modest revision from the initial estimate of 61.8. This data surveys consumers about their own financial situations, giving us an indication of willingness to spend. It was not enough of a change to become relevant in this morning's bond trading or mortgage pricing.
Next week has just a few relevant economic reports set for release and none of them are nearly as important as some of this week's data. The week will start with the release of June's Factory Orders report late Monday morning, but it shouldn't have a noticeable impact on mortgage rates. In addition to the data, next week has two Treasury auctions that may affect rates during afternoon trading midweek and now that the FOMC meeting is behind us (and the Fed's quiet period), we will get plenty of Fed-member speeches in the coming days. Look for details on all of next week's mortgage-relevant activities in Sunday evening's weekly preview.
Lock if my closing were taking place within 7 days...
Lock if my closing were taking place between 8 and 20 days...Lock if my closing were taking place between 21 and 60 days...Lock if my closing were taking place over 60 days from now...
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