![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week near unchanged which left rates relatively flat. Rates worsened most of the week with small steady increases seen through Thursday. MBS prices rallied late Friday morning in response to Fed Chair Powell’s speech (details below) which erased the earlier losses. The data was mixed but generally showed solid housing. The NAHB index was 32 vs 34. Housing starts were 1.428M vs 1.29M. Weekly jobless claims were 235K vs 225K. The Philadelphia Fed business conditions index was 25 vs 21. Existing home sales were 4.01M vs 3.92M. Leading economic indicators fell 0.1% as expected. Mortgage interest rates finished the week with discount points near unchanged despite the volatility.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| New Home Sales | Monday, Aug. 25, 10:00 am, et | 630K | Important. An indication of economic strength and credit demand. Weakness may lead to lower rates. |
| Durable Goods Orders | Tuesday, Aug. 26, 1:15 pm, et | Down 4%% | Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates. |
| FHFA House Price Index | Tuesday, Aug. 26, 10:00 am, et | Unchanged | Moderately Important. A measure of single-family house prices. Weakness may lead to lower rates. |
| Consumer Confidence | Tuesday, Aug. 26, 10:00 am, et | 98% | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| Q2 GDP | Thursday, Aug. 28, 8:30 am, et | Up 3% | Very important. The aggregate measure of US economic production. Weakness may lead to lower rates. |
| Weekly Jobless Claims | Thursday, Aug. 28, 8:30 am, et | 236K | Important. An indication of employment. Higher claims may result in lower rates. |
| Personal Income and Outlays | Friday, Aug. 29, 8:30 am, et | Up 0.4%, Up 0.5% | Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates. |
| PCE Core Inflation | Friday, Aug. 29, 8:30 am, et | Up 0.3% | Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve. |
Jackson Hole
Kansas City Federal Reserve’s annual economic symposium took place in Jackson Hole Wyoming. Fed officials, top economists, and industry titans gathered at what is considered the center of the macroeconomic world. Fed Chair Powell signaled the Fed may cut rates at the September meeting as employment conditions are softening. He stated, “The July employment report released earlier this month showed that payroll job growth slowed to an average pace of only 35,000 per month over the past three months, down from 168,000 per month during 2024. This slowdown is much larger than assessed just a month ago, as the earlier figures for May and June were revised down substantially. But it does not appear that the slowdown in job growth has opened up a large margin of slack in the labor market, an outcome we want to avoid.”
Markets reacted positively as both stocks and bonds rallied. Investors interpreted the speech as dovish and supportive of rate cuts. This is great news in the short-term for mortgage interest rate.
