![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week slightly positive which helped rates push a little lower. Rates improved throughout most of the week but lost a considerable portion of the gains Friday morning in response to stronger than expected data. Unemployment was 3.4% vs 3.6%. Non-farm payrolls rose 517K vs 190K. Average hourly earnings rose 0.3% as expected. The data prior to Friday morning showed signs that the rate hikes are working. FHFA housing fell 0.1% vs the expected unchanged reading. Consumer confidence was 107.1 vs 108.1. Employment cost index rose 1% vs 1.1%. ISM Index was 47.4% vs 48. ADP employment was 106K vs 170K. Weekly jobless claims were 183K vs 200K. Productivity rose 3% vs 2.5%. Unit labor costs rose 1.1% vs 1.5%. Mortgage interest rates finished the week better by approximately 1/8 of a discount point.
Looking Ahead
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| Trade Data | Tuesday, Feb. 7, 8:30 am, et |
$62B deficit | Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates. |
| 3-year Treasury Note Auction | Tuesday, Feb. 7, 1:15 pm, et |
None | Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Consumer Credit | Tuesday, Feb. 7, 3:00 pm, et |
$28B | Low importance. A significantly large increase may lead to lower mortgage interest rates. |
| 10-year Treasury Note Auction | Wednesday, Feb. 8, 1:15 pm, et |
None | Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Weekly Jobless Claims | Thursday, Feb. 9, 8:30 am, et |
195K | Important. An indication of employment. Higher claims may result in lower rates. |
| 30-year Treasury Bond Auction | Thursday, Feb. 9, 1:15 pm, et |
None | Important. Bonds will be auctioned. Strong demand may lead to lower mortgage rates. |
| U of Michigan Consumer Sentiment | Friday, Feb. 10, 10:00 am, et |
60.5 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
Fed Statement
The Fed’s statement following last week’s 25 basis point rate hike indicated, “In determining the extent of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.”
A cautious approach to float/lock decisions is prudent in this volatile environment.
