Good Friday morning from your Hometown Lender. Here we go with the last market analysis of the week:
It has been a brutal week in the markets. Traders selling any bonds they can find pushing yields into the stratosphere. Expectations supposedly the Fed will hike several more times is one explanation for the move although I don’t see that as likely. Oil bounced around and while the moves in bonds were exaggerated, they did follow the trajectory of moves in oil. Iran is supposedly ready to talk about the Strait and nuclear weapons. If true, we could see a turn around in rates soon.
A great quip from Dr. Elliott Eisenberg:
Domestically generated inflation due to an overheated economy warrants rate hikes. But with the labor market weak enough that wage growth is declining and is now less than inflation, and with house prices barely rising, a hike is a mistake. Inflation pressures are being driven by three largely temporary exogenous supply shocks: tariffs, war (energy/food), and the AI buildout, and none of those pressures will lessen with rate hikes.
Market Analysis – From a higher and better view:
Stocks are finding reasons to smile. Borrowing costs haven’t quite joined the party.
Market Analysis – Quick Snapshot
Latest completed mortgage benchmarks, September 24, from Mortgage News Daily:
- 30-year fixed: 7.45%
- 15-year fixed: 7.10%
- 30-year jumbo: 7.55%
Friday’s intraday snapshot: the 10-year Treasury yield is approximately 5.22%, while mortgage bonds are modestly firmer. That’s some breathing room, but hardly an all-clear. These are market benchmarks, not individual loan quotes.
Financial Markets: The Market Analysis Says – A Little Optimism, Plenty of Caution
U.S. stocks were slightly higher late this morning as enthusiasm for artificial intelligence supported buying. Oil eased, although Brent remained above $100 a barrel—keeping energy costs on the inflation watchlist.
Economy: Consumers Feel the Squeeze
September’s final University of Michigan sentiment reading fell to 48.1 from 51.7 in August. Meanwhile, consumer’s one-year inflation expectations increased to 4.6% from 4.0%. My takeaway: households feel less confident while expecting higher prices—a difficult combination for spending and monetary policy.
Fed Watch: Rate Relief Isn’t a Given
Traders were pricing roughly a two-thirds chance of an October Fed rate increase. Market probabilities can change quickly, but today’s message is clear: don’t build a financing plan around an assumed cut.
Politics: More Time, Unfinished Business
The Trump–Xi summit brought a two-month extension of the trade truce, while major disagreements over tariffs, technology and rare-earth supplies remained. My read: additional negotiating time helps, but businesses still face policy uncertainty.
Housing: Shop the Payment Before the Property
Before weekend showings, refresh your numbers. Compare the full payment—including taxes, insurance and any HOA dues—and evaluate seller credits alongside price reductions. Agents: a current financing conversation can prevent an uncomfortable surprise after an offer is accepted.
Lock or Float?
My market analysis: general bias is toward protecting an affordable payment when closing is near. Floating deserves a clear deadline and a defined tolerance for higher costs. A hopeful headline isn’t a rate-lock strategy.
Stay safe and make today great!