The Case of The Disappearing Rate Cuts

The Fed expected to be able to cut rates 3 times in 2024 as recently as March. Financial markets agreed. But the data that's come out since then has everyone singing a different tune. This week's data was more of an afterthought compared to last week's. The chart above pertains to Fed rate expectations, and that's not exactly the same as longer term rates like mortgages and 10yr Treasury yields. The latter saw a bit more volatility this week. Monday's Retail Sales data was much stronger than expected and markets reacted immediately. Tuesday's data was consequential, but it was followed by a speech in which Fed Chair Powell had an opportunity to provide some updated thoughts on the rate outlook. After all, the Fed hadn't seen the most recent CPI data (and several other strong reports) at the time the last round of rate projections came out in March. As the market expected, the tone is evolving. While Powell and the Fed repeat that the rate path depends on economic data, it's no surprise to see recent comments acknowledging a surprising amount of strength in the recent data. Stronger data means fewer rate cuts. Powell went as far as saying there was new uncertainty as to whether the Fed will even be able to cut in 2024. Two days later, NY Fed President John Williams struck similar tone. Just last week, he had pushed back on the CPI data, saying the Fed wasn't surprised by setbacks in the inflation data. This week's comments did more to acknowledge the other side of data dependency. Specifically, Williams said the Fed could hike again if the data called for it.

April 19, 2024 Download our Mobile App: Download our Mobile App: Mortgage Rate Watch The Case of The Disappearing Rate Cuts The Fed expected to be able to cut rates 3 times in 2024 as recently as March. Financial markets agreed. But the data that's come out since then has everyone singing a different tune. This week's data was more of an afterthought compared to las... (read more) MBS Commentary Gradually Pulling Back From Flight to Safety Bid Overnight The overnight session began with a very clear flight to safety in stocks (sell) and bonds (buy) on headlines regarding increased hostilities between Iran and Israel. There have been plenty of "increased hostility" headlines this week that have ... (read more) Rob Chrisman Cybersecurity, TPO, Verification Tools; Tech Tracking Whereabouts; Why Rates Are Where They Are It is “Take Your Child to Work Day” next Thursday which, if you work from home, is probably like a day off from school for the tyke. (I won’t be bringing my son Robbie to work, who, as I write this, is pedaling from Chicago to New York and bunked dow... (read more) Mortgage Rates 30 Yr. Fixed Rate 7.44% +0.01% Rate Change Points Mortgage News Daily 30 Yr. Fixed 7.44% +0.01 0.00 15 Yr. Fixed 6.85% +0.01 0.00 30 Yr. FHA 6.92% +0.02 0.00 30 Yr. Jumbo 7.62% 0.00 0.00 7/6 SOFR ARM 7.41% +0.01 0.00 30 Yr. VA 6.94% +0.02 0.00 Updates Daily - Last Update: 4/19 15 Yr. Fixed Rate 6.85% +0.01% Rate Change Points Freddie Mac 30 Yr. Fixed 7.10% +0.22 0.00 15 Yr. Fixed 6.39% +0.23 0.00 Updates Weekly - Last Update: 4/18 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 7.13% +0.12 0.00 15 Yr. Fixed 6.64% +0.18 0.64 30 Yr. Jumbo 7.40% +0.27 0.46 Updates Weekly - Last Update: 4/17 MBS / Treasuries UMBS 30YR 6.0 99.32 +0.03 Price / Yield Change MBS UMBS 6.0 99.32 +0.03 UMBS 6.5 101.09 +0.00 GNMA 6.0 100.08 +0.02 GNMA 6.5 101.15 +0.01 Pricing as of: 4/19 5:31PM EST 10 Year US Treasury 4.6238 -0.0027 Price / Yield Change US Treasury 2 YR Treasury 4.988 -0.002 5 YR Treasury 4.673 -0.004 7 YR Treasury 4.655 -0.006 10 YR Treasury 4.624 -0.003 30 YR Treasury 4.715 -0.017 Pricing as of: 4/19 5:31PM EST Latest Video Don't expect the first Fed rate cut until December, says SMBC Nikko Securit... UBS: The Fed will implement its first rate cut in September December is 'closest possible date' for potential Fed cut, says Wells Fargo... Fed will keep rates higher longer: Ed Yardeni Around the Web CNBC Feds Goolsbee says more sniffing may be needed before rate cuts CNBC Mortgage rates are now at the highest level of the year, and could go even higher Marketwatch Amex sees 7% boost in card spending as profit crushes estimates Reuters Fed policy on hold because of 'stalled' progress on inflation, Goolsbee says Marketwatch Leading index for U.S. economy retreats again in March Calculated Risk Blog NMHC: "Apartment Market Continues to Loosen" Calculated Risk Blog Q1 GDP Tracking: Movin' on Up Calculated Risk Blog NAR: Existing-Home Sales Decreased to 4.19 million SAAR in March Marketwatch Treasury yields drop in muted flight to quality after Israel retaliation Marketwatch D.R. Horton's stock rallies as limited home supply boosts profit and sales CNBC Treasury yields fall as investors weigh economic data, Fed comments CNBC Israel and Iran: All-out war, or measured retaliation? CNBC Israel carries out limited strike against Iran, source says

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