Good Friday AM from your hometown lender,

The jobs report is always the big data set for the month and most often, creates volatility.

Today report was no different. Markets were expecting jobs to be at 133k, it came in at 177k. Sounds like a big beat and it is but there were also downward revisions to prior months for 58k. All in all, for the folks thinking the economy was cratering, they were wrong (at last for now).

The unemployment rate held steady even with the higher jobs numbers so we must have had more people entering the workforce. The knee jerk reaction to the data has not been good. The 10-yr note has shot back up to 4.33% and seems to be settling here for now. I would think the 10-yr will settle back down but with the Fed meeting next Tuesday and Wednesday, I would not expect much improvement before we hear from Chairman Powell Wednesday AM.

This morning’s data created a big shift in the outlook of a Fed rate cut in June, which before this jobs report was about a 65% probability.

Markets have dropped the chances of a Fed cut in June all the way down to less than 40% now. As we are seeing this AM, changed expectations will pressure mortgage rates higher in the short term, and makes the takeaways after the Fed meeting and press conference next week even more important. If Fed Chair Jerome Powell gives markets the impression that the Fed is unlikely to give in to President Trump’s desires of seeing the Fed cut rates, we could see mortgage rates creep higher.