![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week slightly lower which put upward pressure on rates. Rates worsened the beginning of the week, bounced back slightly mid-week, and ended on a negative note. Trade tensions took center stage Friday as the US Administration warned of a 35% tariff on Canada. Stocks and bonds saw selling pressure in response. There were very few economic releases. Weekly jobless claims were 227K vs 235K. Consumer credit was $51.B vs $11B. The 3Y Treasury note auction was solid with indirect bidders (an indication of foreign demand) taking a significant share. The 10Y and 30Y auctions also showed solid demand. This suggests continued investor appetite for U.S. government debt across the curve. Mortgage interest rates finished the week worse by approximately 1/4 of a discount point.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
|---|---|---|---|
| Consumer Price Index | Tuesday, July 15, 8:30 am, et | Up 0.3%, Core up 0.3% | Important. A measure of inflation at the consumer level. Weaker figures may lead to lower rates. |
| Producer Price Index | Wednesday, July 16, 8:30 am, et | Up 0.2%, Core up 0.2% | Important. An indication of inflationary pressures at the producer level. Lower figures may lead to lower rates. |
| Industrial Production | Wednesday, July 16, 9:15 am, et | Unchanged | Important. A measure of manufacturing sector strength. Weakness may lead to lower rates. |
| Capacity Utilization | Wednesday, July 16, 9:15 am, et | 77.4% | Important. A figure above 85% is viewed as inflationary. Weaker figure may lead to lower rates. |
| Fed “Beige Book” | Wednesday, July 16, 2:00 pm, et | None | Important. This Fed report details current economic conditions across the US. Signs of weakness may lead to lower rates. |
| Retail Sales | Thursday, July 17, 8:30 am, et | Unchanged | Important. A measure of consumer demand. Weakness may lead to lower mortgage rates. |
| NAHB Housing Index | Thursday, July 17, 10:00 am, et | 33 | Moderately Important. A measure of single-family housing. Weakness may lead to lower mortgage rates. |
| Housing Starts | Friday, July 18, 8:30 am, et | 610K | Important. A measure of housing sector strength. Weakness may lead to lower rates. |
Fed Minutes
The Federal Reserve’s minutes from the last meeting reported, “Treasury yields rose modestly, credit spreads narrowed, and equity prices increased. Markets were attentive to the de-escalation of trade tensions; generally weaker-than-expected economic data releases, with the notable exception of the May employment report; and prospects for fiscal expansion. These factors, on net, resulted in some paring back of investors’ perception of downside risk to growth and upside risk to inflation.”
The minutes reflect a central bank that remains cautious and divided in the face of mixed economic signals and ongoing uncertainty about the effects of tariffs and global developments. Most officials lean toward rate cuts later in 2025, but the path forward will depend on evolving data and risks. A cautious approach to float/lock decisions is prudent until the Fed signals rate cuts are on the way.
