Good Friday AM from your Hometown Lender,
Some data again today (below), which came in mostly weaker than markets expected. After CPI and Employment data ran hot over the previous few weeks and pushed rates up .5%, any new data which looks to point to a slowing economy is helping to bring rates back down.. Currently the 10-yr is sitting at 4.20 and roughly .125 (1/8) lower than where it was a week ago. It won’t be a straight line down, but any improvement is welcome. The pop in higher rates pushed buyers back to the sidelines. Hopefully as rates creep down, it will bring more buyers out of hibernation. But then, is there enough inventory to meet that demand? I think not, which is why we are seeing prices continue to increase.
Buy now if you are going to buy at all.
• ISM MFG 47.8 vs 49.5
• Construction Spend -0.2 vs 0.2
• Consumer Sent 76.9 vs 79.6
Yesterday’s PCE data also allowed Fed officials to stick to a narrative of cautious optimism about rate cuts.
Mary Daly yesterday said central bank officials are ready to lower interest rates as needed but emphasized there’s no urgent need right now, while John Williams reiterated that he expects the central bank to cut rates later this year. Meanwhile Raphael Bostic said recent inflation readings indicate “there are going to be some bumps along the way” to target, and Austan Goolsbee cautioned against reading too much into a single month’s inflation data. Reading between the lines, ‘Cuts should start in June, I am hoping for May.’
There’s another deluge of Fed speakers due today, with at least seven officials slated to make remarks.
The eurozone’s annual rate of inflation slowed again in February as food prices cooled, increasing the likelihood that the European Central Bank will also cut its key interest rate later this year. The European Union’s statistics agency Friday said consumer prices across the 20 economies that share the euro were 2.6% higher than a year earlier, a slowdown in the annual rate of inflation from 2.8% in January. That drop followed the release of figures Thursday that showed the measure of the annual rate of inflation in the U.S. preferred by the Federal Reserve declined in January.
Please remain safe and healthy, enjoy the weekend, make today great!!!
