Good Friday AM from your Hometown Lender,

Yahtzee!

The biggest economic report of the month, the BLS Jobs report, was released this morning. It was weak. Very very weak. If you really want the numbers, a quick version is 117k new jobs on expectations of 185k. Last month’s report was revised down by 10%, wage growth came in below expectations, and the unemployment rate ticked up to 4.3%. This on top of a weak ADP report and higher unemployment claims put the employment picture in rough shape.

The Fed spoke about employment being a concern at their meeting Wednesday. Their fears are realized. The 10-yr has dropped to 3.83% this morning. That takes us back to December of 2023. WOW. The 2-yr, which has been inverted for almost 2-yrs is now, at 3.90%.

A little comment on the 2-10 spread (also known as the Ted spread).

It has been said that when the yield curve inverts, it is a sign of an impending recession. That is often true, but the start of the recession doesn’t actually happen until the curve un-inverts. Mortgage bonds have improved more than 35bps today and 100bps this week. We won’t see all of that in rate sheets yet for a few reasons; concerns on volatility and prepayment speeds to name two. However, those lower rates are coming. Many loan programs will now have rates available in the 5’s. If you weren’t sure if you should buy, you should be sure now! Inventory will be swallowed up and prices will be going higher.

I am keeping it short and sweet today and will leave with a recap of the Olympic Medal Count. GO TEAM USA!!!

Stay safe, enjoy the weekend, and make today great!