Good morning on this fantastic Friday from your Hometown Lender,

Rates are slipping a bit this am as markets start to consolidate ahead of the Fed meeting.

Consumer sentiment was the only economic data on the calendar today and it fell ff a cliff. It is an important metric but does not typically move markets. I continue to think it is a good ideal to lock in advance of the Fed meeting knowing you can always float down on any additional improvements.

Here is a higher level insight:

🏦 Mortgage Market & Rate Analysis

Friday, September 12, 2025

📊 Where Rates Stand

30‑Year Fixed: ~6.21%–6.33% (lowest since October 2024)
15‑Year Fixed: ~5.20%–5.50%
10‑Year Treasury Yield: ~4.06% (steady after yesterday’s CPI release)
Trend: Rates have fallen for three straight days, driven by softer labor data and market confidence that the Fed will cut rates next week.

📅 Today’s Economic Context – 9/12

Yesterday’s CPI Recap: Headline inflation came in slightly hotter than expected at +0.4% MoM vs. +0.3% forecast, and core CPI was 0.346% (rounded to 0.3%).
- Why rates didn’t spike: Jobless claims jumped to 263k (highest since 2021), and “supercore” inflation (excluding food, energy, and housing) cooled sharply to 0.33% from 0.48%. This combination reinforced the view that the labor market is weakening enough for the Fed to ease policy despite sticky headline inflation.
Today’s Market Tone: Mortgage rates are holding near their lows, with lenders cautious ahead of the weekend and next week’s Fed decision.

🗓 This Week’s Key Drivers

Labor Market Weakness:
- Aug. jobs report: +22k payrolls, unemployment up to 4.3% — weakest in years.
- BLS benchmark revision (9/9): Prior‑year job growth cut by 911k, confirming a cooler labor market.
- Jobless claims (9/11): 263k vs. 235k expected — highest since 2021.
Inflation Data:
- PPI (9/10): Wholesale inflation modest, no surprises.
- CPI (9/11): Slightly warm headline/core, but offset by supercore cooling and labor softness.
Market Reaction:
- Bond yields fell sharply after the jobs report and stayed low despite CPI, signaling markets are prioritizing growth risks over inflation fears.
- Mortgage rates followed, with the 30‑year fixed dropping ~0.15% this week3.

🏛 Political & Policy Developments

Fed Outlook: CME FedWatch now shows ~94% odds of a 25 bp cut at the Sept. 17 FOMC meeting. Odds for additional cuts later in 2025 have eased slightly after the CPI report, as some analysts warn warm inflation could limit how far the Fed goes this year.
Winners & Losers of a Cut:
- Winners: Borrowers with adjustable‑rate mortgages, HELOCs, credit card balances, or plans to refinance; businesses with floating‑rate debt.
- Losers: Savers in CDs, money markets, and short‑term Treasuries, as yields on these products will likely fall.
Global & Domestic Politics: Trade policy debates and leadership shifts abroad are influencing global bond demand, indirectly affecting U.S. mortgage rates.

🔮 Forward‑Looking Rate Expectations

Short Term (Next Week):
- Fed cut is widely expected; history shows mortgage rates often move before the Fed and can tick higher afterward (“buy the rumor, sell the news”).
- If next week’s data (retail sales, housing starts) confirm slowing growth, rates could hold or improve slightly.
Medium Term (Fall 2025):
- Continued labor softness + easing inflation could bring well‑qualified borrower rates into the high‑5% range by year‑end.
- Risks: Stronger‑than‑expected economic data, sticky inflation, or weak Treasury auction demand.

📅 Key Economic Calendar – Sept 15–20, 2025

Date	Event	Market Impact Potential
Mon 9/15	Empire State Manufacturing Survey	Low–Medium
Tue 9/16	Retail Sales, Industrial Production	Medium
Wed 9/17	FOMC Rate Decision	Very High
Thu 9/18	Jobless Claims, Housing Starts	Medium
Fri 9/19	Leading Economic Indicators	Medium

“Mortgage rates are now at their lowest point in nearly a year, thanks to softer job growth and signs of cooling inflation beneath the surface. The Fed is expected to cut rates next week, but history shows mortgage rates often move before the Fed — and can bounce afterward. If you’re considering a refinance or purchase, this is a smart time to review your options while rates are still near these lows.”

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