Good Monday Morning from your Hometown Lender,

Today is an important day as we take some time to remember and reflect on those who were brutally lost in the attack by Hamas against Israel one year ago today, as well as their families and friends, and those who survived the barbaric attack.

We should also take the same time to remember those who were innocently killed and harmed in the Israeli repose to those attacks in Gaza. I don’t know that we should ever stop mourning for them as we don’t for those lost in the 9/11 attacks here in the USA.

Not any economic data to speak of today but nonetheless,

Markets are still overreacting to last Friday’s jobs report. Market sentiment went from expectations the Fed may cut 50bps in November to now zero chance of 50bps and a possibility there will be no cut at all. That last part is highly unlikely unless we get some major increase in the inflation reports we will get on Thursday and Friday of this week. Between now and the end of the week with both CPI and PPI, we have some Fed speak from several Fed members which can move markets although I think they will try to walk back the markets overreaction, we have the Fed minutes from the last meeting, and a 10-yr auction.

The WSJ share a good story on the path of interest rates. I am including an excerpt from it below.

“The key is not necessarily whether the Fed cuts short-term rates by 25 or 50 [basis points] but how that reduction is interpreted further out on the yield curve by bond market participants,” says Mark Palim, chief economist at Fannie Mae. Friday’s stronger-than-expected jobs report sent yields on 10-year Treasurys sharply higher. That could be a strong indication of the direction of mortgage bonds, and in turn the individual mortgage loans that are packaged into those bonds. Going forward, even mixed economic data from here wouldn’t necessarily help lower mortgage rates if it drives big market swings. Volatility tends to push mortgage rates a bit higher, because it leads to relatively weaker demand for mortgage bonds and widens their spread to benchmark Treasurys. That puts upward pressure on the rates offered by lenders to borrowers. It is also worth remembering that just because so many people have a neighbor with a mortgage rate that begins with a two or three or four doesn’t mean they should assume that is the natural state of things. In this century alone, the average weekly Freddie Mac measure of 30-year fixed rates is over 5%, according to Federal Reserve data.

Stay safe and make today great!!!