Latest news
26th July, 24
Straightforward Gains After Important Inflation Data
Straightforward Gains After Important Inflation Data While today's monthly core PCE headline may have technically been higher than the median forecast, a vast majority of forecasters abstained from submitting updated guesses to data aggregators after yesterday's quarterly PCE data. Had they been compelled to do so, the forecast would almost certainly have risen to 0.2 from 0.1 and today's unrounded number of 0.182 would be the logical beat that the market traded... logically. In fact, one might call the 2 day action "boring" considering this morning's quick PCE-driven rally
Straightforward Gains After Important Inflation Data
Straightforward Gains After Important Inflation Data While today's monthly core PCE headline may have technically been higher than the median forecast, a vast majority of forecasters abstained from submitting updated guesses to data aggregators after yesterday's quarterly PCE data. Had they been compelled to do so, the forecast would almost certainly have risen to 0.2 from 0.1 and today's unrounded number of 0.182 would be the logical beat that the market traded... logically. In fact, one might call the 2 day action "boring" considering this morning's quick PCE-driven rally
26th July, 24
Inflation Data Continues Paving The Way For (Eventual) Rate Cuts
This week's most important economic data was the PCE price index which is the gold standard of big picture inflation measurement. For those hoping to see rates drop, it was important for PCE to confirm the progress seen in the CPI data (the other major inflation index that came out 2 weeks ago). Spoiler alert: PCE confirmed the progress, but there are a few nuances. Perhaps most importantly, this week's PCE data covers the same time frame as the CPI data two weeks ago. In other words, it's not quite as awesome as 2 consecutive months of "mission accomplished" levels of
Inflation Data Continues Paving The Way For (Eventual) Rate Cuts
This week's most important economic data was the PCE price index which is the gold standard of big picture inflation measurement. For those hoping to see rates drop, it was important for PCE to confirm the progress seen in the CPI data (the other major inflation index that came out 2 weeks ago). Spoiler alert: PCE confirmed the progress, but there are a few nuances. Perhaps most importantly, this week's PCE data covers the same time frame as the CPI data two weeks ago. In other words, it's not quite as awesome as 2 consecutive months of "mission accomplished" levels of
26th July, 24
DPA, Virtual Assistant, Non-QM products; Events, Training, and Webinars
The only thing constant is change. After 53 years, Southwest Airlines is ending its 100 percent open seating policy! (I don’t mind lining up.) People and companies have to adjust… Time waits for no one. What were concerts like in 1964, 60 years ago? Here’s an interesting chart that shows where the U.S. Government pegged interest rates through history, including 1964. (In the 4’s.) While we’re on interest rates, many clamor for lower rates, whether that means 6 or 5 or 4 percent is unclear. There’s a lot of talk about the Federal Reserve’s Open Market Committee lowering the fed
DPA, Virtual Assistant, Non-QM products; Events, Training, and Webinars
The only thing constant is change. After 53 years, Southwest Airlines is ending its 100 percent open seating policy! (I don’t mind lining up.) People and companies have to adjust… Time waits for no one. What were concerts like in 1964, 60 years ago? Here’s an interesting chart that shows where the U.S. Government pegged interest rates through history, including 1964. (In the 4’s.) While we’re on interest rates, many clamor for lower rates, whether that means 6 or 5 or 4 percent is unclear. There’s a lot of talk about the Federal Reserve’s Open Market Committee lowering the fed
26th July, 24
Bonds Rallying Despite Higher Core PCE
After yesterday's quarter over quarter core PCE price index came in 0.2% higher than expected, we knew today's monthly PCE data would have to include higher numbers divided across the months of April, May, and June in some unknown proportion. If April and May were not revised, it suggested an unrounded monthly core PCE of 0.37 today, which would have rounded to a 0.4% headline versus the 0.1% forecast. But that would be very uncommon, so markets split the difference and figured the extra inflation would be spread more evenly across the quarter. Forecasters who updated
Bonds Rallying Despite Higher Core PCE
After yesterday's quarter over quarter core PCE price index came in 0.2% higher than expected, we knew today's monthly PCE data would have to include higher numbers divided across the months of April, May, and June in some unknown proportion. If April and May were not revised, it suggested an unrounded monthly core PCE of 0.37 today, which would have rounded to a 0.4% headline versus the 0.1% forecast. But that would be very uncommon, so markets split the difference and figured the extra inflation would be spread more evenly across the quarter. Forecasters who updated
25th July, 24
Lots of Competing Motivations Causing Volatility In a Narrow Range
Lots of Competing Motivations Causing Volatility In a Narrow Range Today marked an uptick in the importance of economic data for the week and it had obvious consequences for volatility. Of particular importance was the higher reading in quarterly PCE prices. Because this is the first look at Q2 data, it's one of 4 days each year where the PCE component of the GDP data offers a sneak peek at the full PCE report that comes out the following morning. the 2.9 vs 2.7 reading suggests there's extra inflation that will be distributed between April, May, and June. If June
Lots of Competing Motivations Causing Volatility In a Narrow Range
Lots of Competing Motivations Causing Volatility In a Narrow Range Today marked an uptick in the importance of economic data for the week and it had obvious consequences for volatility. Of particular importance was the higher reading in quarterly PCE prices. Because this is the first look at Q2 data, it's one of 4 days each year where the PCE component of the GDP data offers a sneak peek at the full PCE report that comes out the following morning. the 2.9 vs 2.7 reading suggests there's extra inflation that will be distributed between April, May, and June. If June
25th July, 24
Mortgage Rates Inch to Another Short Term High
Mortgage rates continue moving in very small steps from day to day--something that's been the case since the Consumer Price Index (CPI) more than 2 weeks ago. Unfortunately, more of those steps have been higher in the past week, and today is no exception for most lenders. This is counterintuitive to those who closely follow bonds markets and who understand that mortgage rate movement closely matches those underlying market movements. Reason being: bonds are technically in stronger territory compared to yesterday. Strength in the bond market almost always coincides with lower
Mortgage Rates Inch to Another Short Term High
Mortgage rates continue moving in very small steps from day to day--something that's been the case since the Consumer Price Index (CPI) more than 2 weeks ago. Unfortunately, more of those steps have been higher in the past week, and today is no exception for most lenders. This is counterintuitive to those who closely follow bonds markets and who understand that mortgage rate movement closely matches those underlying market movements. Reason being: bonds are technically in stronger territory compared to yesterday. Strength in the bond market almost always coincides with lower
25th July, 24
Strong Start Despite Data Driven Volatility
It was easy to question the notion of "data dependence" in the first half of the week, largely because there wasn't much in terms of meaningful economic data. There were also several instances of mystery movement in bonds, forcing analysts to focus on curve trading as a thematic driver. What is curve trading? In not so many words, there's been a bit of a mad dash to get out of long term and into shorter term bonds since late June. Sometimes the moves line up with data and/or Treasury auctions. Other times, they've been more serendipitous. Curve trading has
Strong Start Despite Data Driven Volatility
It was easy to question the notion of "data dependence" in the first half of the week, largely because there wasn't much in terms of meaningful economic data. There were also several instances of mystery movement in bonds, forcing analysts to focus on curve trading as a thematic driver. What is curve trading? In not so many words, there's been a bit of a mad dash to get out of long term and into shorter term bonds since late June. Sometimes the moves line up with data and/or Treasury auctions. Other times, they've been more serendipitous. Curve trading has
25th July, 24
Hedging, VOE, DPA Products; Wholesaler and Program Changes; STRATMOR Ops Workshop
As lenders continue to deal with change (the latest rumors have Flagstar is selling its mortgage group to Mr. Cooper; rumor only, ask your rep for real information), many people took note when ex-President Trump claimed, during his recent speech, that, “mortgage rates have quadrupled” during the Biden Administration. So, if Agency 30-year fixed rate mortgages were 3 percent, due to the pandemic, not due to political policies, they’d be at 12 percent now. That is not the case. There are still economics to discuss (Fannie Mae’s Chief Economist Doug Duncan will be interviewed today) but
Hedging, VOE, DPA Products; Wholesaler and Program Changes; STRATMOR Ops Workshop
As lenders continue to deal with change (the latest rumors have Flagstar is selling its mortgage group to Mr. Cooper; rumor only, ask your rep for real information), many people took note when ex-President Trump claimed, during his recent speech, that, “mortgage rates have quadrupled” during the Biden Administration. So, if Agency 30-year fixed rate mortgages were 3 percent, due to the pandemic, not due to political policies, they’d be at 12 percent now. That is not the case. There are still economics to discuss (Fannie Mae’s Chief Economist Doug Duncan will be interviewed today) but
24th July, 24
Mortgage Rates Move Up To 2 Week Highs After Starting Out Flat
Mortgage rates technically moved up to the highest levels in 2 weeks today, but that sounds a bit more dramatic than it actually is. Rates have largely held inside a narrow range close to the lowest levels in 6 months during that time. Today's weakness in the bond market just happened to nudge the average mortgage lender slightly above the highs seen this past Monday and Friday. The average borrower wouldn't see much of a difference between those rates and today's. As for the underlying motivation for the movement, it doesn't merit much discussion or investigation.
Mortgage Rates Move Up To 2 Week Highs After Starting Out Flat
Mortgage rates technically moved up to the highest levels in 2 weeks today, but that sounds a bit more dramatic than it actually is. Rates have largely held inside a narrow range close to the lowest levels in 6 months during that time. Today's weakness in the bond market just happened to nudge the average mortgage lender slightly above the highs seen this past Monday and Friday. The average borrower wouldn't see much of a difference between those rates and today's. As for the underlying motivation for the movement, it doesn't merit much discussion or investigation.
24th July, 24
Whatever Happened to Bonds Being Data Dependent?
Whatever Happened to Bonds Being Data Dependent? Bonds began the day in stronger territory and remained stronger through mid-day despite AM volatility. Some of the volatility was driven by economic data with S&P Global Services PMI coming in higher than expected. Most of the day's movement, however, was driven by "something else," and something else pushed longer term yields higher while allowing short term yields to remain lower. How do we reconcile that in this era where "data dependence" is so often repeated as the bond market's prime directive? First off, while
Whatever Happened to Bonds Being Data Dependent?
Whatever Happened to Bonds Being Data Dependent? Bonds began the day in stronger territory and remained stronger through mid-day despite AM volatility. Some of the volatility was driven by economic data with S&P Global Services PMI coming in higher than expected. Most of the day's movement, however, was driven by "something else," and something else pushed longer term yields higher while allowing short term yields to remain lower. How do we reconcile that in this era where "data dependence" is so often repeated as the bond market's prime directive? First off, while
