May 9th, 2025 11:19 AM by T. Fanning
Hello, I hope you’ve had a good week!
With little economic news, investors focused on the Fed, which held rates steady and signaled ongoing uncertainty. Tariffs make future rate moves tricky, but most expect a cut in July. A strong services report pushed mortgage rates slightly higher for the week.
Next week has some big economic updates, including two important inflation reports and data on consumer spending. Monday will be quiet, so weekend news could affect the markets. If the U.S. and China agree on a trade deal that lowers tariffs, it could help bring interest rates down by reducing inflation worries. The most important reports will come out on Tuesday and Thursday.
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Last Updated: 5/9/25
Friday's bond market has opened in positive territory to recover part of Thursday afternoon's bond selling. Stocks are looking to close the week on a positive note also with the Dow up 76 points and the Nasdaq up 102 points. The bond market is currently up 4/32 (4.36%), but losses yesterday after morning pricing was posted is going to cause this morning's rates to be approximately .125 - .250 of a discount point higher than Thursday's morning rates.
Yesterday's 30-year Treasury Bond auction failed to live up to Tuesday's sale. The benchmarks we use to gauge investor demand indicated Tuesday's auction drew much more interest than yesterday's sale did. Soft auctions often lead to broader weakness in the bond market after results are announced at 1:00 PM ET. We did see a negative move after yesterday's results were posted, but bonds were already in selling mode long before the announcement. In other words, the below-average demand is not the main reason for yesterday's heavy sell-off in bonds.
So, if it wasn't the auction that led to the bond selling and widespread intraday upward revisions to mortgage pricing, what caused it? There is no clear answer. President Trump's announcement of a trade deal with the UK is the easy answer. Lower tariffs mean stronger economic growth and less likely of a recession. However, it also should ease some inflation concerns that have been pressuring bonds the past couple of months. If this is the reason for the selling, the reaction seems to be overkill and not justified.
Today's only scheduled events that may influence mortgage rates are a large number of speaking engagements by members of the Federal Reserve. There are at least nine different events where a member is either the sole speaker or participating in a group discussion. Most of the event topics appear to be fairly mundane, but one or more of these events may yield a surprise tidbit that is relevant to factors currently driving the markets, such as inflation, tariffs and the slowing economy. These very well may be a non-factor to the markets, but the potential does exist for a reaction, especially when there is no economic data for traders to focus on.
Next week brings us the release of some very important influential economic data, including two key inflation indexes and consumer spending data. The week starts light with nothing scheduled Monday that is considered to be relevant, leaving weekend headlines to drive trading as the new week begins. The most important data is set for release Tuesday and Thursday. 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... Float 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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