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MIG Market Watch, May 26th, 2025
Posted by : Moneek-2
Market Comment
Mortgage bond prices finished the week lower which put upward pressure on rates. Rates worsened Monday, stayed higher mid-week, and received a slight reprieve Thursday afternoon and Friday morning. Tariff pressures and a downgrading of US debt by Moody’s drove trading. The Treasury auctions saw weak demand as warned the prior week. The data was mixed, and stocks were volatile. Leading economic indicators fell 1% vs the expected 0.9% decrease. Weekly jobless claims were 227K vs 230K. Existing home sales were 4M vs 4.1M. New home sales 743K vs 692K. Mortgage interest rates finished the week worse by approximately 1/2 of a discount point.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
|---|---|---|---|
| Durable Goods Orders | Tuesday, May 27, 8:30 am, et | Down 8% | Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates. |
| FHFA House Price Index | Tuesday, May 27, 10:00 am, et | Up 0.2% | Moderately Important. A measure of single-family house prices. Weakness may lead to lower rates. |
| Consumer Confidence | Tuesday, May 27, 10:00 am, et | 88 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| Fed Minutes | Wednesday, May 28, 2:00 pm, et | None | Important. Details of the last Fed meeting will be thoroughly analyzed. |
| Q2 GDP | Thursday, May 29, 8:30 am, et | Down 0.3% | Very important. The aggregate measure of US economic production. Weakness may lead to lower rates. |
| Personal Income and Outlays | Friday, May 30, 8:30 am, et | Up 0.2%, Up 0.2% | Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates. |
| PCE Core Inflation | Friday, May 30, 8:30 am, et | Up 0.1% | Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve. |
| U of Michigan Consumer Sentiment | Friday, May 30, 8:30 am, et | 50.8 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
Consumer Confidence
The Conference Board releases the Consumer Confidence Index on the last Tuesday of every month. The report details the levels of confidence individual households have in the performance of the economy. The data is derived from a survey of 5,000 households nationwide. The survey polls consumer opinions on current business conditions, their jobs, their incomes, and their future spending plans. The Conference Board is a non-profit group that has produced the data since 1967.
The consumer confidence index is significant in that it provides a precursor into the willingness of consumers to spend in the months ahead. Consumers are vital to the US economy as consumer spending is a large portion of the gross domestic product. Manufacturers attempt to gauge consumer spending and adjust production accordingly. The challenge that many analysts note is the fact that a consumer’s willingness to spend does not always convert to an actual expenditure.
Be cautious heading into economic releases in the days ahead. Signs of strength will likely push rates higher. However, significant weakness could alleviate rate pressures.
