No change this week as investors continue to wait and see

More of the same this week, no change to rates.

Happy Friday from Local Mortgage!

It was a pretty quiet week for economic data this week with mortgage bond trading in a pretty narrow range. Not a lot of movement in the markets so rates will end the week right where we started at 6.375% for our best 30-year fixed conventional scenarios.

Monday and Tuesday were positive days for rates as investors seemed to approve of Treasury Secretary Scott Bessent’s comments around the ongoing feud between the executive branch and the Fed. Bessent took a gentler tone towards Fed Chairman Powell, saying that he should not be fired and that he should see his term through if that is what he wants to do. Not surprising that bonds reacted favorably to his calls for stability.

Markets pulled back some on Wednesday and Thursday. The only real data point came Thursday as jobless claims fell below the consensus forecast which could be blamed for some of the pullback, but the most common reasoning is that markets continue a wait and see approach. Markets have traded sideways for a few weeks now, which makes sense as there is not a majority consensus on which way the economy is heading. Still a lot to play out as far as tariffs and inflation and their overall impact on the broader aspects of the economy.

In real estate news, June existing home sales fell 3% from May, and are basically unchanged from a year ago. Inventory is up to a 4.7-month supply nationally, which is 16% higher than this time last year.

Looking ahead, Wednesday’s widely anticipated Fed meeting will be the headliner. The majority of investors believe that the Fed is likely to hold rates despite the political pressure to lower them, but a 25-basis point cut is still possible.  Even without a rate change, commentary from Fed officials could start to move markets. As far as next week’s economic reports, we will get second quarter GDP on Wednesday and inflation data with the PCE Index on Thursday.

Hope everyone has a great weekend and thank you for reading.