Good Monday morning from your Hometown Lender,

I hope you had a terrific Father’s Day. This will not be as busy of a week as it was last week (for economic data). Still, we do have some important data coming out. The retail sales report is at the top of the list, we get that tomorrow. Wednesday markets are closed and on Thursday/Friday we get some housing data. The Fed members will be on their respective road shows and I think there are 8 or 9 appearances and commentary on the schedule. Neel Kashkari who was a dove during the pandemic, then became the most vocal hawk as even last month he was claiming the Fed may have to tighten further, is now out saying a rate cut will be appropriate later this year. He said December which markets didn’t like but at least he is not clamoring for even higher for even longer. I am hopeful the retail sales report comes in subdued and traders see that as another reason to push yields lower. Right now we are bouncing between 4.20% and 4.30% on the ten-year note yield. We would like to break below 4.15% to open up the next lower trading channel. I don’t expect much volatility today.

A good recap of what’s on the minds of traders from the WSJ:

A Big Bond Rally Is Promising Some Help for Home Buyers

Signs of cooling inflation have driven a furious bond rally this month, boosting stocks to records and promising to inject some life into the listless housing market. 

The sharp rise in bond prices has pushed down the yield on the 10-year U.S. Treasury note by nearly a half percentage point since late May. The yield on Friday notched its largest two-week decline of the year, settling at 4.212%. A benchmark for mortgage rates and other borrowing costs across the economy, the 10-year yield is heavily influenced by investors’ expectations for short-term interest rates set by the Federal Reserve. Still, investors’ renewed appetite for bonds was barely slowed last week when the Fed suggested it would be cautious about cutting rates in Signs of cooling inflation have driven a furious bond rally this month, boosting stocks to records and promising to inject some life into the listless housing market. 

The sharp rise in bond prices has pushed down the yield on the 10-year U.S. Treasury note by nearly a half percentage point since late May. The yield on Friday notched its largest two-week decline of the year, settling at 4.212%. A benchmark for mortgage rates and other borrowing costs across the economy, the 10-year yield is heavily influenced by investors’ expectations for short-term interest rates set by the Federal Reserve. Still, investors’ renewed appetite for bonds was barely slowed last week when the Fed suggested it would be cautious about cutting rates in the coming months. Futures markets Friday showed investors think there is a better than 70% chance that the Fed will cut rates at least twice this year, with the first cut most likely happening in September, according to CME Group data. That was double the chances seen in late May.

Stay safe and Make today great!