Good Thursday, AM from your Hometown Lender,

There was some important data today.

Unemployment claims are higher, and GDP is lower. That doesn’t sound like a growing economy to me. Mortgage bonds started the day off weaker but got an early assist from data. There is nothing to get too excited about, rates are range-bound until the next shoe drops.

Yesterday, the Fed released the minutes of its last meeting. They were equally boring. The effect tariffs will have on inflation is unknown, and the Fed has time to decide whether or when to adjust its rate stance.

Tomorrow brings the PCE inflation data along with Personal Income and Personal Spending.

Markets are looking for all of the data to come in on the weaker side. If there is a miss to the stronger side, it will hurt rates. I do not think floating into tomorrow’s data is a good idea.

Last night, the Trade Court (did you know there is a Trade Court? I didn’t…) voided Trump’s reciprocal tariffs.

President Trump levied tariffs based on the 1977 law his administration was using to give him the power to set them (rather than Congress). Wall St now calling it the TACO trade (Trump Always Chickens Out). The ruling will not matter much, as there are plenty of other options for tariffs to be imposed under other guises or names.

Elon Musk is back in the private sector full time.

What does any or all of this mean for mortgage rates? I don’t think much. For rates to improve, one (or a few) thing need to happen. The US economy needs to weaken (retail spending), Unemployment needs to increase, and/or the world wants to put its money in our bonds (which I would think, with the dollar devalued, would be a good choice regardless). None of that is happening right now.

That was the economy, now on to some news which will impact our industry…

President Trump recently announced re-privatizing the government-sponsored entities (GSEs)—Fannie Mae and Freddie Mac. That will have far-reaching implications for homebuyers, investors, and the broader economy.

“Our great Mortgage Agencies, Fannie Mae and Freddie Mac, provide a vital service to our Nation by helping hardworking Americans reach the American Dream—Home Ownership. I am working on TAKING THESE AMAZING COMPANIES PUBLIC, but I want to be clear, the U.S. Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President. These Agencies are now doing very well, and will help us to, MAKE AMERICA GREAT AGAIN!”

We will see what the unintended consequences are.