What’s Happening?
All news below is color-coded as “good“, “bad“, or “neutral” for mortgage rates.
•The government shutdown ended (neutral for rates): The shutdown ended a few weeks ago and markets really don’t care! We’re a few months behind on some economic data (CPI and jobs reports). The October reports probably won’t ever be released since data collection was incomplete during the shutdown.
•Next Fed Rate Cut (good for rates): The Fed meets next Wednesday on Dec 10th, and the Fed Futures Market is pricing in an 87% likelihood that the Fed will cut rates. As usual, mortgage rate markets are already pricing in that cut, which means the cut next week is unlikely to impact mortgage rates at all.
•Jobs Report (neutral for rates): The September BLS Labor Report was released this month, a month late due to the shutdown, and new jobs reported at 119,000. Some economists estimate the economy needs to create about 100,000 jobs per month to keep up with growth in the working-age population, however, unemployment ticked up a little in September, suggesting the break-even jobs number could be higher. This report suggests an average labor market, not hurting or helping mortgage rates.
•Unemployment Metric (good for rates): The unemployment number, up slightly again, and the 3rd month in a row, now at 4.4%. 1 year ago, unemployment was at 4.1%. This increase adds fuel to the Fed-rate-cut fire and odds of another 0.25% cut on Dec 10th are now projected by the futures market at a 87% probability.
•Inflation Report (neutral for rates): The October CPI (Consumer Price Index) and PPI (Produce Price Index) reports are unlikely to be released due to the shutdown.
