Good Monday AM, from your Hometown Lender,

The first thing to share is that President Trump has sent in the National Guard to protect Washington, D.C. The crime in D.C. has been rampant for a long time and is one of the few cities where serious crime is increasing.

Bonds are flat to start the morning as there is no data release on the schedule for today.

Things do get busier with CPI tomorrow, PPI on Thursday, and Retail Sales data on Friday. There will be volatility. Markets are already anticipating a little higher inflation, but that is buoyed by the expectations that the Fed will be cutting rates, so the 10-year note yield and mortgage bonds pricing are mostly steady.

The question is how many times will the Fed cut?

Michelle W. Bowman, who is very influential within the Fed and is the Federal Reserve’s vice chair for supervision, is sharpening her call for interest rate cuts, pointing to fresh evidence of labor market weakness as a reason to move sooner rather than later. Speaking to the Kansas Bankers Association on Saturday, Bowman said, “The latest labor market data reinforce my view” that three rate cuts this year are appropriate. Three cuts (which I do expect) would push rates down another .50% and push mortgage rates into the low 6’s and possibly the 5’s. Government loans with a buydown could be in the higher 4’s. I hate to say any of this too loudly so as not to anger the gods but that is the path I think we are finally on.

Stay safe and make today great!