Good Morning on this fantastic Tuesday from your Hometown Lender,

Today is a slow day for economic data which, I am happy about as it is also the last day to file taxes.

Rates are a bit better than Friday as bonds woke up after the 3-day weekend showing signs that they may have hit bottom. 4.11% on the 10-yr yield was expected to be a hard line in the sand (we hit that last week). Having held that line, we now get to see how far we travel back down the channel. We are sitting at 4.05% now and I am hopeful over the next few days, we will get back to a 3 handle.

The Fed is data dependent so what will impact of Hurricanes Helene and Milton do to the data, is a question. Will unemployment claims jump? They should. Will retail sales slump? They should. We should see a slowing of the economic data fairly quickly over the next weeks which will drive the Fed to cut again in November and likely December. I am slightly less convicted on December just because the fallout from the election will be start to be felt by that Fed meeting. Lots of pundits out there will be beating the drum that the impact of the hurricanes doesn’t identify the true economic reality but regardless of the external forces of a hurricane, the reality is that people are impacted and need to get food, water, shelter, jobs, and all that comes with living.

We may only see a blip for a few months, but it is a real blip none the less.

I think rates have a good chance of improving from here.

Stay safe and make today great!