![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week higher which put a little downward pressure on rates. Rates improved the beginning of the week amid reports of foreign AI advancements. US tech stocks sold off sharply and there was flight to safety buying of US debt instruments. Rates remained relatively stable the remainder of the week with a little choppiness surrounding the Fed meeting. The Fed left rates unchanged. The data continued to be mixed. New home sales were 698K vs 670K. FHFA housing rose 0.3% vs 0.2%. Consumer Confidence was 104.1 vs 105.6. Durable goods fell 2.2% vs the expected 0.8% increase. Q4 GDP rose 2.3% vs 2.6%. Weekly jobless claims were 207K vs 220K. Core PCE prices rose 0.2% as expected Mortgage interest rates finished the week better by approximately 3/8 of a discount point.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
|---|---|---|---|
| ISM Index | Monday, Feb. 3, 10:00 am, et | 49.5 | Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates. |
| Factory Orders | Tuesday, Feb. 4, 10:00 am, et | Down 0.1% | Important. A measure of manufacturing sector strength. Weakness may lead to lower rates. |
| ADP Employment | Wednesday, Feb. 5, 8:30 am, et | 150K | Important. An indication of employment. Weakness may bring lower rates. |
| Trade Data | Wednesday, Feb. 5, 8:30 am, et | $87B deficit | Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates. |
| Weekly Jobless Claims | Thursday, Feb. 6, 8:30 am, et | 214K | Important. An indication of employment. Higher claims may result in lower rates. |
| Preliminary Q4 Productivity | Thursday, Feb. 6, 8:30 am, et | Up 1.7% | Important. A measure of output per hour. Improvement may lead to lower mortgage rates. |
| Employment | Friday, Feb. 7, 8:30 am, et | 4.1%, Payrolls +170K | Very important. An increase in unemployment or weakness in payrolls may bring lower rates. |
| U of Michigan Consumer Sentiment | Friday, Feb. 7, 10:00 am, et | 71.8 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
Fed Statement
The Fed left rates unchanged last week and stated, “Recent indicators suggest that economic activity has continued to expand at a solid pace. The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.”
Fed Chair Powell followed the release with assurances that the Committee will win the inflation battle over time. Market jitters were calmed by Powell’s remarks.
