![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week near unchanged which kept rates steady. Stocks saw heavy selling and the DOW was down over 1000 points for the week. There was continued back and forth MBS trading but mostly within a very narrow range. Rates started the week slightly negative Monday, recovered Tuesday, were worse mid-week, and ended on a positive note Friday. The data started to show more weakness. ISM Index was 50.3 vs 50.5. ADP employment rose 77K vs 140K. The trade deficit was $131.4B vs $127.4B. Weekly jobless claims were 221K vs 235K. Productivity rose 1.5% vs 1.2%. The jobs report was rate friendly. Mortgage interest rates finished the week with discount point near unchanged.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
|---|---|---|---|
| 3-year Treasury Note Auction | Tuesday, March 11, 1:15 pm, et | None | Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Consumer Price Index | Wednesday, March 12, 8:30 am, et | Up 0.3%, Core up 0.3% | Important. A measure of inflation at the consumer level. Lower than expected increases may lead to lower rates. |
| 10-year Treasury Note Auction | Wednesday, March 12, 1:15 pm, et | None | Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Producer Price Index | Thursday, March 13, 8:30 am, et | Up 0.3%, Core up 0.3% | Important. An indication of inflationary pressures at the producer level. Lower figures may lead to lower rates. |
| Weekly Jobless Claims | Thursday, March 13, 8:30 am, et | 222K | Important. An indication of employment. Higher claims may result in lower rates. |
| 30-year Treasury Bond Auction | Thursday, March 13, 1:15 pm, et | None | Important. Bonds will be auctioned. Strong demand may lead to lower mortgage rates. |
| U of Michigan Consumer Sentiment | Friday, March 14, 10:00 am, et | 62.8 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
Employment Results
The U.S. Bureau of Labor Statistics released the monthly employment report last Friday. The BLS stated, “Total nonfarm payroll employment rose by 151,000 in February, and the unemployment rate changed little at 4.1 percent.” Analysts expected payrolls to increase by 160,000 and the unemployment rate at 4%. The report also noted, “Employment trended up in health care, financial activities, transportation and warehousing, and social assistance. Federal government employment declined.” This was not a surprise as the new U.S. Administration has explicitly stated they intend to reduce the size of the U.S. Federal workforce. The average hourly earnings component increased 0.3% as expected.
Mortgage interest rates improved slightly in response to the weaker than expected data. Rates generally favor moderate growth with very little price pressures. The current employment report plays a significant role in shaping the Federal Reserve’s future rate cut policy, as it provides critical insights into the health of the labor market. The Fed closely monitors employment data, such as nonfarm payrolls, the unemployment rate, wage growth, and other labor market indicators, to assess whether the economy needs monetary policy adjustments, like rate cuts, to support growth.
