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This is generally a good report for the Fed and potentially good news for mortgage rates, but there is an important wrinkle. July retail sales fell 0.6%, versus expectations for a 0.1% gain. It was the first monthly decline in nine months. More importantly, the control group, which is used as an input into GDP calculations, fell 0.4%. What does it mean? 1. The consumer is starting to slow…

The inflation beast may finally be getting tamed. The latest PPI report came in weaker than expected, adding another piece to the growing story that inflation is cooling. After the softer CPI reading earlier this week, today’s PPI data gives the bond market another reason to breathe a little easier. And the market is responding. Rates are improving. This is exactly the combination we’ve been…

CPI Drops. PPI Expected to Follow. Mortgage Rates Drop. We got the inflation news the market was looking for. July CPI came in at 3.4% year over year, down from 3.5%, while core CPI held at 2.5% year over year. Both were essentially in line with expectations. And the bond market liked it. The 10-Year Treasury moved lower, giving mortgage-backed securities a boost and providing some immediate…

The latest Existing Home Sales report shows July closings declined 1.7%, bringing the annualized pace to approximately 4.06 million homes, just slightly above the 4.05 million expected. While sales are lower than we would like to see, the bigger story may be just how stable the housing market has remained despite elevated mortgage rates. It continues to come down to the basic economics of…

We have some important inflation readings coming this week that could provide additional relief for mortgage rates. The Consumer Price Index (CPI) report is due Wednesday, and expectations are for headline inflation to ease from 3.5% to 3.4%. The core reading, which excludes the more volatile food and energy categories, is expected to decline from 2.6% to 2.5%. While those may look like small…

The Bureau of Labor Statistics (BLS) released its July Jobs Report this morning, and it came in much weaker than expected. The economy lost 23,000 jobs, compared to expectations for an 80,000-job gain. In addition, payrolls for May and June were revised lower by a combined 103,000 jobs, reinforcing the view that the labor market has been slowing for several months. In my opinion, this is exactly…

As I mentioned earlier this week, a few Federal Reserve members stated that the labor market remains robust and even voted in favor of raising the Fed funds rate. Looking at the recent data, I struggle to see the same level of strength. Tomorrow’s Bureau of Labor Statistics (BLS) jobs report will be a key market-moving event and could play an important role in shaping the Fed’s thinking on…

At the last Federal Reserve meeting, three Fed members, including Lori Logan, voted in favor of raising rates, citing a labor market they believed was solid and continuing to strengthen. Really? From where I sit, the data tells a different story. The labor market has been gradually losing momentum, and today’s ADP employment report is yet another piece of evidence pointing in that direction.…

Let’s remember what the market looked like before the Iran conflict began. Mortgage rates had finally moved below the 6% for the first time in many years. After years of borrowers sitting on the sidelines with rates in the high 6s, 7s, and even 8% range, we were starting to see a meaningful wave of refinance opportunities. Many homeowners were positioned to lower their monthly payments by…

Let’s make the bond market a little less confusing… Our industry has a language all its own, and sometimes you have to stop and translate what everyone is actually talking about. Here’s the easy version. When investors buy bonds, they’re really buying a promise to receive interest over time. Bond Price = What investors are willing to pay for the bond. Bond Yield = The return (interest rate)…

I know I’ve said this before, but it’s worth repeating because it’s fundamental to understanding where mortgage rates are headed. The Federal Reserve’s primary tool for fighting inflation is the Federal Funds Rate. By raising this rate, the Fed makes borrowing more expensive throughout the economy. It affects businesses looking to borrow money to expand, invest in new equipment, or hire…

Much of the oil that once moved through the Persian Gulf before the conflict is still reaching global markets, but through different channels. Over two-thirds of pre war oil. Some tankers are operating with their transponders turned off, making it more difficult to track shipments. In addition, approximately 7 million barrels per day are being transported via Saudi Arabia’s East-West Pipeline to…

My Friday morning thoughts. When the economy is growing quickly, consumers generally have more money to spend. If demand for goods and services is stronger than the available supply, businesses can raise prices because people are willing to pay more. That’s inflation. To cool things down, the Federal Reserve raises interest rates. Higher rates make borrowing more expensive, not only for…

Market Update The geopolitical standoff continues, and the threat of a broader regional conflict remains serious. Iran has warned that the Strait of Hormuz is a non-negotiable red line and has stated it would target oil infrastructure throughout the region, including neighboring countries, if the U.S. were to carry out attacks on Iranian power plants or bridges. If tensions escalate, oil prices…

Earlier this year, oil was trading below $60 a barrel, inflation was running near 2.4%, and conventional mortgage rates dipped below 6%, the lowest levels we’d seen in quite some time. Just a few months later, the picture looked very different. Oil prices surged, inflation moved higher, and conventional mortgage rates climbed back toward 7%. A major driver of that volatility has been the…

This is good news for future home buyers and first time home buyers. Now we just need rates to cooperate. More housing supply: The bill is designed to encourage the construction of more homes to help address the nationwide housing shortage. Faster development: It includes measures to streamline permitting and reduce barriers that can delay new housing projects. Support for affordable housing:…

Pip: Mortgage rates, Fed minutes, oil prices, and a Fed chair who apparently has to talk the board out of hiking rates — welcome to the bond market's version of a group project where nobody agrees on the deadline.Mara: Today we're working through posts from Jackkammer covering two connected territories: where the Fed actually stands on rates, and what falling oil prices are and aren't doing to…