Mortgage rates prepare for a Fed rate cut death blow 🥊📉😵
The Week Ahead
WEEK AHEAD 🗓️
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Markets have all eyes on the Fed with expectations of another 25-bps cut.
However, the last 5 rate cuts have all resulted in a bond sell-off (higher mortgage rate prices).
Although bonds have recently found some footing, mortgage rates have not yet fully recovered from the October Fed cut jump and are still 20-bps higher in price than 60 days ago.
This vulnerability means another cut could deliver an end of the year death blow.
If bonds take a hit like they did in 2024, and investors throw in the towel, the most mortgage-rate-friendly-year since 2021 could end with a T.K.O.
This week is all about the Federal Open Market Committee’s rate decision on Wednesday, but Tuesday preludes the Fed meeting with a rescheduled job openings report (JOLTS) and a 10-Year note auction.
The Producer Price Index was originally scheduled for Thursday, but as a result of the government shutdown it appears the BLS does not intend to provide any further PPI data this year.
Looking ahead to the following week, we will get a rescheduled Non-Farm Payroll employment report on Tuesday, December 16.
Monday I will take a deeper look at how mortgage rate prices, bond spreads, and longer-term trends are unfolding in my Mortgage Rate Data Deluge.
The latest Lock-O-Meter risk scores and rate lock recommendations will be posted with it.
Thanks for reading.
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