Weekly Mortgage Rate Update- 04-09-2024


“Are we there yet?” Sometimes I think we are kids in the car with mom and dad on a long road trip, where time creeps by and it seems like we will never get to the destination.   In this case the driver is not mom and dad but inflation (or maybe Powell).  The driver is going to decide how fast or slow we get there.  But where are we even headed?  When you don’t know where you are going it makes the trip longer.

Powell has said he is in no rush to cut the Fed rate.  The worst thing for his legacy is to cut too soon and have inflation flare back up.  So, Inflation is still in the driver’s seat. Powell wants to see a clear trend towards lower inflation, but it has been choppy for the 1st quarter of 2024. Tomorrow, we get another pivotal report with the CPI inflation reading for March.  Expectations are for it to moderate from February’s reading.  Every inflation report before the June meeting will matter.  Current market expectations still show 56% of the market thinks they will cut in June.

Last Friday non-farm payrolls showed another strong month for employment.  Headline was 303k jobs added to the economy.  Overall, a strong reading but some have pointed out that there seems to be a large amount of part time and multiple job holders that is perhaps skewing just how good the data is.   According to the Bureau of Labor Statistics 4.3 million part time workers would like to be full time but can’t find full time employment. Under employment is a concern. Having to take multiple jobs doesn’t really speak to a strong economy but it looks good on paper.  Regardless, our focus is on the impact of the data on mortgage rates and the Fed seems to be taking its cue from the headline numbers. Although, the subdued reaction in rates after the strong report tells me the mortgage bond market is maybe weighing the underlying concerns.

So far rates pretty much unchanged from last week, treading water ahead of the CPI data tomorrow. So just relax and enjoy the ride.

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