CHM Blog

This morning stock indexes trading better, rates up a little. This morning December Case/Shiller home price index month/month +0.5% with forecasts of +0.3%; year/year 20 cities +1.4% as expected.

Chicago Fed President Austin Goolsbee this morning. He echoed what most all Fed officials have been saying recently that rate cuts aren’t appropriate until there’s more evidence that inflation is on its way down. Goolsbee reminded how the Fed in 2020 believed inflation at the time was transitory and cut rates only to see inflation remained elevated for much longer than the Fed believed. Goolsbee noted that policymakers “have been burned by assuming transitory inflation” in the past and shouldn’t make the same mistake again. “I feel that front-loading too many rate cuts is not prudent in that circumstance,” he said in remarks before the National Association for Business Economics at its annual gathering in Washington, D.C. “People express that prices are one of their most pressing concerns. Let’s pay attention. Before we cut rates more to stimulate the economy, let’s be sure inflation is heading back to 2%.” Last week December PCE inflation data was slightly higher than forecasts.

Fed Governor Chris Waller, a strong advocate for lower rates, at the same conference commented on the strength of the employment sector that recent employment metrics have been better than anticipated. He espoused, if the jobs picture continues to improve, that would further lessen the case for cuts, though he said he isn’t convinced that the January nonfarm payrolls data wasn’t “more noise than signal.”

Tonight, the State of the Union address, that should keep markets stable through the day.

At 10 am the Conference Board consumer confidence data. The sentiment index expected at 88.0 from 89.0 (revised from 84.5) in January, the index increased to 91.2.

PRICES @ 10:00 AM

10 year note: 4.18% -1 bp

5 year note: 3.72% -2 bp

2 year note: 3.47% -1 bp

30 year bond: 4.87% unch

30 year FNMA 5.0: @9:30 am 99.69% +5 bp (-10 bp from 9:30 am Friday)

30 year FNMA 5.5: @9:30 am 101.43 +5 bp (-6 bp from 9:30 am Friday)

30 year GNMA 5.0: @9:30 am 99.73 +5 bp (-8 bp from 9:30 am Friday)

Dollar/Yen: 156.76 -0.07 yen

Dollar/Euro: $1.1683 -$0.0038

Dollar Index: 98.69 +0.27

Gold: $4,434.70 +$105.40 (safety move)

Bitcoin: 93,265 +1994

Crude Oil: $58.05 +$0.73

DJIA: 48,922 +553

NASDAQ: 23,401 +166

S&P 500: 6898 +40

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.

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