pool cabana overlooking ocean

Market Snapshot 01/28/2025 – Little Bit of Data

Good Tuesday AM from your Hometown Lender,

A little bit of news today and it was pretty dismal.

Durable goods orders (you know the stuff that lasts a long time) were negative… Consumer confidence was lower than expected and while the Richmond Fed survey was marginally better than expected, it too was negative.

Despite all of the bond friendly news, that today is day one of the FOMC meeting, markets are consolidating ahead of tomorrow’s decision. That tariff talk is reemerging is no help. We still seem to be holding on to much of the recent gains and only giving back a small amount.

What we are giving back is less than a tip to a waiter after a good meal.

The 10-yr is at 4.58% and I do see us (assuming the Fed doesn’t say anything damaging) improving to below 4.50% and then continue to creep south. It is never a straight line up or down so don’t be easily swayed.

Here is a question for you economists…

What does an AI startup in China (or any AI company) have to do with the price of natural gas in the U.S. and mortgage rates? Think that through… If the need for electricity in the new cpu’s decreases (as is supposedly the case with DeepSeek), oil needs decrease. Oil needs decrease means more supply and less demand. We know that equation very well and as oil is the third biggest component to CPI, well, inflation should subside and could give some relief to rates.

Please stay safe and make today great!!!