Good Tuesday, AM from your Hometown Lender,

Is there a ceasefire in the Middle East?

If so, does that mean the US ended the conflict that quickly? It appears so, if you are watching oil contracts as the price continues to head lower. The world is undoubtedly safer now with Iran having less nuclear capability, but even more impressive is the US show of strength. The rest of the world is taking note and rewriting their playbooks.

Lots of data today.

The most interesting to me was not the Case-Shiller Home Price Index, which still shows home prices rising both monthly and annually. It was the Consumer Confidence data that tanked by 6 points… Are you feeling confident in the economy? Bonds are trying, they just keep running into a wall when the 10-yr hits 4.30 (which is where we are now).

Rates are starting to show some improvement.

Today, we will see Fed Chair Jerome Powell in the first of two days of testimony before Congress, starting at the House Financial Services Committee, and tomorrow, in front of the Senate Banking Committee. Powell’s prepared opening remarks were released ahead of the meeting so markets could digest them. They were essentially the same as his commentary after the FOMC meeting last week and there has been no market movement on that news.

There seems to be drama brewing behind the scenes at the Fed, which ultimately could help lower mortgage rates.

• Fed Governor Michelle ‘Miki’ Bowman, who was appointed to the Fed by Trump in his first term in 2018 (a 14-year term) and recently took over as the Fed’s Vice Chair for Supervision, seems to have flipped her script. A devout hawk before (in this case meaning against rate cuts), Bowman has pivoted to now say she expects only “minimal impact” on inflation from trade policy, and “should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market.” Sounds to me like either someone from the Trump camp has gotten into her ear, or kidnapped her dog (kidding, just something that would happen on that streaming channel show).

• Fed Governor Christopher Waller has been dovish for longer and has been championing Fed rate cuts since earlier this year.

When the minutes from this last Fed meeting come out later next month, we will get to see if anyone went on the record to push for cuts despite the unanimous vote to leave the Fed rate unchanged.

Lots more data on the schedule for this week. I am particularly interested in GDP and Durable Goods on Thursday along with PCE on Friday.

Stay safe and make today great!