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Category: Newsletters

Record Single Day Drop in Rates After Inflation Comes in Cooler

Heading into this week, we knew that Thursday’s Consumer Price Index (CPI) would be critically important. It did not disappoint. CPI is one of two key inflation reports in the US.  PCE (Personal Consumption Expenditures) is the other big index, but because CPI comes out 2 weeks earlier, it gets almost all of the market’s…
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Higher Rates Due to The Fed, But Not Due to The Fed’s Rate Hike

The Federal Reserve hiked rates by 0.75% this week and 30yr fixed mortgage rates moved moderately higher.  Interestingly enough, those two things are fairly unrelated. The Fed Funds Rate (the thing the Fed “hikes” when you hear about the Fed hiking rates) applies to overnight loans among large financial institutions.  It’s important, to be sure, but it…
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Rates Actually Moved Lower This Week; What’s a “Fed Pivot?”

The average 30yr fixed mortgage rate officially moved over 7% this week according to major weekly surveys, but mortgage rates actually moved lower! Why the discrepancy?  It’s fairly simple. Weekly rate surveys lag reality.  For instance, most of the responses for Freddie Mac’s survey (the most widely cited among news organizations) are in by Tuesday,…
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Sifting Through Ashes For Seeds Of Hope

There’s no way to sugarcoat the situation in the bond market and, by extension, the mortgage and housing markets. Rates have risen at a nearly unprecedented pace, ushering in one of the quickest cooldowns on record. One of the only ways to find hope in this environment is to imagine that bad news is finite.…
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20 Year High Rates as Inflation Persists. Any Hope in Sight?

Unsurprisingly, the market remains intently focused on inflation as the key driver of Fed policy and rate volatility. This week, the biggest inflation report combined with more UK market drama to push rates to another 20yr high. The UK doesn’t typically factor into our assessment of market movement in the US, but the past 3 weeks…
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Rates Back to 20 Year Highs as Economy Remains Resilient

The resilience of the economy is a matter of debate with different cases to be made depending on the data. But when it comes to the Fed’s favorite reports, the data hasn’t given them any reason to go easy on rates. The Fed doesn’t directly dictate mortgage rates, but it does set the Fed Funds…
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Even Crazier Than Last Week: Rates Briefly Topped 7% For 1st Time in 20 Years

There was no rest for weary rate watchers after last week’s rout. This week turned out to be even more volatile. UK in The Spotlight (Still) UK issues are still having a big impact.  Last week’s rate spike was most readily attributable to market panic over a budgetary decision in The UK.  Panic remained on…
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Mortgage Rates Closing in on 7%. Any Relief in Sight?

In order to make the most of today’s newsletter, you’ll need a basic understanding of the Fed Funds Rate (the thing the Fed actually hikes or cuts in an attempt to keep inflation in a target range) and the fact that mortgage rates are very different from the Fed Funds Rate. Here is a handy…
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6.0% Rates? Big Hike From The Fed Next Week? Both Old News. Here’s What Matters

By this time next week, we will have heard from the Fed as they announce the next rate hike on September 21st.  It will be big too.  Just how big is a matter of debate.  0.75% is a safe starting point, but 1.00% will be on the table as well.  The former would match July’s…
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Things Are About to Get Interesting

It’s certainly already been an interesting year for financial markets–especially for housing and interest rates. But most of what’s happened over the past 8 months could be thought of as the more predictable phase of the post-pandemic market cycle. It’s what happens next that’ll be more interesting. How could anyone say that the last 8…
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