August 29th, 2025 8:48 AM by Richard Sardella MLO.100007700/NMLS 233568
The July Personal Consumption Expenditures report met expectations. July personal income was also right in line with estimates, increasing the most over the last four months. Core inflation year over year at 2.9%. The highest since last February.
On a monthly basis, energy was off 1.1% and food was down 0.1%. Services prices rose 0.3%, essentially accounting for all of the monthly increase as goods decreased 0.1%. Inflation numbers were held in check by a 2.7% annual decline in prices for energy goods and services. Food prices rose 1.9% from a year ago. The balance also tilted heavily toward services prices, which jumped 3.6%, compared to just a 0.5% increase on goods.
The initial reaction was subdued. The Fed has one more key data points prior to the September 17th Federal Open Market Commitee meeting which is the August employment report next Friday. Consensus remains the Fed will cut their key rate at the meeting, but after that it is questionable. Last night Fed Governor Waller spoke, voicing his support for a 25-basis point rate cut in September, adding that he would not support a larger cut unless the August jobs report shows a significant deterioration in the labor market.
The July US trade deficit was higher than estimates at $103.8B against $87.7B forecasts.
At 9:45 am the August Chicago purchasing managers index fell to 41.5.
PRICES @ 10:00 AM
10 year note: 4.24% +3 bp
5 year note: 3.72% +2 bp
2 year note: 3.65% unch
30 year bond: 4.92% +4 bp
30 year FNMA 6.0: @9:30 am 102.08 -8 bp (-6 bp from 9:30 am yesterday)
30 year FNMA 6.5: @9:30 am 103.60 -1 bp (-2 bp from 9:30 am yesterday)
30 year GNMA 6.0: @9:30 am 101.85 -8 bp (-9 bp from 9:30 am yesterday)
Dollar/Yen: 147.16 +0.21 yen
Dollar/Euro: $1.1664 -0.0021
Dollar Index: 98.06 +0.25
Gold: $3,481.80 +$7.50
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Crude Oil: $64.38 -$0.22
DJIA: 45,518 -119
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Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.
All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.
MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.