Weekly Mortgage Rates

March 11, 2025

No more momentum towards lower rates last week despite continued uncertainty in the path ahead. Rates are under some pressure this morning as we await key inflation news tomorrow.

No surprises in the jobs data

February non-farm payrolls came in slightly lower than expected, adding 150k jobs to the economy, versus the 161k expected. No big surprises, but the culmination of data continues to show a softening employment picture.

Inside the data weekly earnings are dropping, even though hourly rates have been steadily increasing. This is because hours worked per week has been decreasing as more work is part-time. This is evident when you look at the U-6 rating which is a household survey in the data. It showed the unemployment rate at 8% because it counts for those that are under-employed. This is the highest reading since October 2021.

From Bloomberg, “Friday’s jobs report is the latest evidence that the labor market is softening just as President Trump’s policies raise concerns about the embroidery economy. Inflation has proven sticky, and in recent months and consumers are starting to pull back on spending which is sustained may lead businesses to rethink hiring plans.” 

Change at any cost has markets on edge

Trump did not rule out a recession in his Fox News interview over the weekend. Unlike the last time he was in office, the score board for winning is not the stock market. Stocks reacted to their abandonment on Monday where the recent sell-off continued and accelerated. 

He noted that a period of transition is required to ‘build a foundation for the future”. There is a stunning determination and urgency to cause momentous change and usher in a ‘golden era’ for the US. It is clear that path won’t be easily swayed. The view is that it will be a short-lived pull back, but will be better off in the long run. The narrative is clear, when Trump addressed Congress last week, he referred to it as a “little disturbance”. A few weeks ago, he said there will be “some pain”.

Expectations versus reality

From a more generous prospective it is possible that all the uncertainty is causing the market to react to the possibility of a slow down in the economy more that the reality of one. As economist Diane Swonk pointed out “We’re all sitting here trying to filter through the noise to the economic reality, but the noise itself has its own economic consequences.” 

What’s ahead

This week we get more inflation data with CPI on Wednesday. It is expected to show a slightly lower rate of inflation. A miss either way will effect rates. 

For now, the downward trend in rates appears to be stalled. The 10-year Note has had a tough time finding support under 4.2%. All last week the market made a few runs at it and ultimately failed to hold below this key level.  

The boost we got in the bond market from the “risk off’ moves from stocks to the safety of bonds has slowed. We aren’t seeing further improvements in rates even after Monday’s stock sell off continuing into today. Totally normal to have a pause and digest after weeks of improvement.