Good Friday morning from your Hometown Lender,

Here’s your expert briefing on today’s mortgage market—designed to help you stay informed, empowered, and ahead of the curve.

Bonds and rates are improved today.

The 10yr note yield is down to 4.26% and at resistance. We need to close at/below 4.24% to push into the next trading channel. The benign speech by Chairman Powell is what the market wanted to hear and is the catalyst for today’s rally (equities are on fire as well). Chairman Powell said something to the effect that “the prospect of a sharper slowdown in the job market might reduce concerns that cost increases due to tariffs will fuel inflation”.

🧠 Economic Drivers Behind Rate Movement

🔺 Tariff-Driven Inflation

• The August Philly Fed Manufacturing Index revealed the steepest rise in input costs since August 2022, driven largely by new tariffs.
• S&P Global’s PMI data confirmed that both manufacturing and service sectors are experiencing cost pressures, with tariffs cited as the primary cause.

Tariff-induced inflation is complicating the Fed’s path to rate cuts, as elevated costs may delay disinflation progress.

📉 Labor Market Weakness

• Jobless claims rose to 235K, and payroll growth has slowed to an average of just 35K/month over the past quarter.
• Fed Vice Chair Michelle Bowman reiterated her call for three rate cuts in 2025, citing deteriorating labor conditions.

If labor softness persists, the Fed may be forced to ease policy sooner—potentially lowering mortgage rates by Q4.

⚖️ Fed Policy Uncertainty

• Chair Powell signaled openness to adjusting policy but emphasized caution amid tariff-related inflation and political pressure.
• President Trump’s threat to remove Fed Governor Lisa Cook adds further instability to the central bank’s decision-making process.

Political interference and internal Fed division could lead to unpredictable rate policy shifts in the coming months.

🏘️ Housing Market Dynamics

❌ Record Cancellations

• July saw nearly 58,000 canceled home-purchase agreements, the highest July rate since 2017.
• Buyers are backing out due to:
• Elevated rates and prices
• Rising insurance premiums (up 9.3% YoY)
• HOA fee spikes and inspection concerns

Affordability challenges and buyer hesitancy are reshaping negotiation dynamics. Sellers must be flexible, and agents should prepare clients for volatility during escrow.

📊 Yield Curve & Rate Forecasting

Term	Yield Δ Change
2-Year 3.76%	⬇️ -0.02%
10-Year 4.33%	⬆️ +0.03%
30-Year 4.92%	⬆️ +0.02%

📊 Yield Curve & Rate Forecasting

Indicator	Status	Implication for Rates
Inflation (Core PCE)	2.9%	⬆️ Sticky, Fed cautious
Labor Market	Weakening	⬇️ Supports rate cuts
Fed Policy Tone	Divided	⚖️ Uncertain trajectory
Political Pressure	Rising	⚠️ Potential volatility

Expect rates to remain range-bound in the short term, with potential easing in Q4 if labor data continues to weaken and inflation stabilizes.

🧭 Strategic Takeaway for Clients

“We’re in a transitional phase. Rates are high, but cracks in the labor market and housing demand suggest a shift is coming. Whether you’re buying, refinancing, or planning ahead—now is the time to prepare, not panic. Let’s build a strategy that aligns with your goals and the evolving market.”

📞 Ready to talk strategy? 

Reply to this email. I’ll help you navigate the market with clarity and confidence

Stay safe, have a great weekend, but first… make today great!!!!