At 8:15 am ET August private jobs were reported by ADP, expected at +48K but reported at +38K and down from revised 46K in July. Friday the BLS will report August employment data.
Weekly MBA mortgage applications last week: total applications increased 0.8% after declining 1.0% the previous week. Refinance apps -1.0% from the previous week. Purchase apps increased 2.2%.
At 2 pm the Fed’s Beige Book, details from the 12 Fed districts, usually a good read but doesn’t always move markets.
PRICES @ 10:00 AM
10 year note: 4.80% unch
5 year note: 4.55% -1 bp
2 year note: 4.40% -1 bp
30 year bond: 5.26% -2 bp
30 year FNMA 6.0: @9:30 am 100.93 +1 bp (-9 bps from 9:30 am yesterday)
30 year FNMA 5.5: @9:30 am 98.71 -2 bp (-10 bp from 9:30 am yesterday)
30 year GNMA 6.0: @9:30 am 101.21 +2 bp (-14 bp from 9:30 am yesterday)
Dollar/Yen: 158.72 -1.47 yen
Dollar/Euro: $1.1594 unch
Dollar Index: 99.60 -0.08
Gold: $4,417.00 +$20.60
Bitcoin: 77,317 +54
Crude Oil: $89.36 -$0.86
DJIA: 53,035 +268
NASDAQ: 26,109 +9
S&P 500: 7648 +17
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.
At 9:45 am ET August PMI manufacturing index, estimates 53.2 from 53.9 in July; reported at 53.9.
At 10 am July JOLTS job openings, estimates at 7.358 million unchanged from 7.359 million in June, reported at 7.271 million, June revised from 7.359 million to 7.182 million. Weaker employment should help a little today.
Also at 10 am, August ISM services sector index thought to be at 55.2, reported 54.6.
10 year note: 4.78% +2 bp
5 year note: 4.53% +2 bp
2 year note: 4.37% +2 bp
30 year bond: 5.26% +2 bp
30 year FNMA 6.0: @9:30 am 101.02 -7 bp (-5 bp from 9:30 am yesterday)
30 year FNMA 5.5: @9:30 am 98.81 -16 bp (-12 bp from 9:30 am yesterday)
30 year GNMA 6.0: @9:30 am 101.35 -4 bp (unch from 9:30 am yesterday)
Dollar/Yen: 160.05 +0.31 yen
Dollar/Euro: $1.1600 -$0.0019
Dollar Index: 99.58 +0.15
Gold: $4,402.10 -$79.40
Bitcoin: 77,882 -1032
Crude Oil: $88.36 +$2.60
DJIA: 52,944 -242
NASDAQ: 26,079 -292
S&P 500: 7638 -48
Neutral
No commitment, real consequences
A single speech in Wyoming just moved the odds of a rate hike in real time. Jake Krimmel, reporting for Realtor.com, breaks down what Kevin Warsh actually said at Jackson Hole, his first address as Fed chairman, and why the whole thing hinged on one carefully engineered contradiction.
Warsh doubled down on the Fed's 2% PCE inflation target, its preferred inflation gauge — on the idea that inflation has run too hot for too long, calling out 65 months of elevated readings as essentially a Fed-made problem. He also doubled down on the policy rate remaining the tool for fixing it. Then he made it clear he would refuse to commit to anything at all.
While this sounds contradictory on its face, he acknowledged the need to act while declining to promise action. Krimmel argues, however, that it's actually a deliberate strategy as well as a credible one. The real question hanging over markets now isn't whether the Fed raises rates. It's when.
Traders reacted instantly. Going into the speech, CME's FedWatch tool had priced in a 64% chance of a September hold. Fifteen minutes in, that dropped to 54%. By the time Warsh wrapped up, markets had flipped to pricing a 57% chance of an actual rate hike. If the goal was making a threat that traders would take seriously, it worked.
For housing, the near-term picture isn't encouraging, though Krimmel frames it as short-term pain in service of a longer-term fix. Warsh's underlying concern about inflation is legitimate, and it hits housing from multiple directions at once. Elevated inflation keeps mortgage rates higher for longer while simultaneously chipping away at real wages and income growth, a double blow that squeezes both housing demand and affordability at the same time. Add in the effect inflation has on building material costs, and the pressure compounds further.
Don't expect meaningful mortgage rate relief this fall, according to Krimmel. But there's a case for patience here: getting inflation under control sooner rather than later is what ultimately puts housing in a stronger position, both on rates and on real purchasing power, over the next 6 to 12 months and beyond.
Realtor, TBWS
How Rates Move:
Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I'm among few mortgage professionals who have access to live trading screens during market hours.
Rates Currently Trending: Neutral
Mortgage rates are under pressure today. The MBS market improved by +11 bps last week. This was not enough to decrease mortgage rates or fees. The market experienced high volatility last week.
This Week's Rate Forecast: Neutral
These are the three things that have the greatest ability to impact rates this week. 1) Geopolitical, 2) Jobs and 3) ISMs.
1) Geopolitical: Last week, the mantra was moving from kinetic to economic warfare with Iran. But this week starts off with fresh military action in the Straight. Bonds will continue to be very sensitive to volatility in oil prices.
2) Jobs: The Fed says that the job sector is "stable". Is it? We will get a ton of job and wage related data all week, culminating in Big Jobs Friday. Prior revisions to the NFP will get a lot of attention as will Average Hourly Earnings and the Unemployment Rate.
3) ISMs: We will get ISM Manufacturing on Tuesday and Services on Thursday. Each contains key inflation (Prices Paid) and employment components.
This Week's Potential Volatility: High
This morning markets have started under pressure due to conflict escalation in the Middle East. Volatility has started at moderate to high levels and could easily become high later in the week.
Bottom Line:
If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.
US and Iran traded attacks over the weekend, the first engagements since early July. The reaction in early trade this morning wasn’t much, the 10 year note up 2 bps, stock indexes al little lower but crude oil price at 8 am ET +$2.88.
Last Friday’s speech from Kevin Warsh put bond markets under pressure, the 2 year note increased 11 bps, the 10 increased 5 bps on comments from Warsh and previously Secretary of Treasury Bessent that funding the debt would use short term rates and less long term rates. Mr. Warsh left markets tilting to a potential rate increase at the September 16th FOMC meeting. Warsh made it clear he wants inflation down to 2.0%, now 3.4%.
This is employment week; it gets rolling on Wednesday with August private jobs from ADP (48K from 44K in July). Friday the BLS August data:
Other key data this week, tomorrow July JOLTS job openings (7.350 million from 7.359 million). Thursday weekly jobless claims (205K from 203K), also Thursday Q2 productivity and unit labor costs, productivity at 1.4% the same as the preliminary release, unit labor costs +1.3% also the same as the preliminary release.
10 year note: 4.76% +4 bp
5 year note: 4.51% +2 bp
2 year note: 4.35% unch
30 year bond: 5.26% +5 bp
30 year FNMA 6.0: @9:30 am 101.07 -7 bp (-20 bp from 10 am Friday)
30 year FNMA 5.5: @9:30 am 98.93 -12 bp (-31 bp from 10 am Friday)
30 year GNMA 6.0: @9:30 am 101.35 -4 bp (-20 bp from 10 am Friday)
Dollar/Yen: 159.83 -0.24 yen
Dollar/Euro: $1.1596 +$0.0011
Dollar Index: 99.53 -0.17
Gold: $4,466.60 -$43.30
Bitcoin: 77,988 -865
Crude Oil: $86.00 +$2.60
DJIA: 53,207 -353
NASDAQ: 26,300 -102
S&P 500: 7677 -35
Markets began unchanged from yesterday ahead of the long-awaited comments from Kevin Warsh at Jackson Hole at 10 am ET, for the last two weeks markets have been anticipating what he will say. The title of his speech; “Financial Innovation: Implications for Payments and Policy.”
Chicago purchasing managers index at 9:45 am dropped to 47.1 on forecasts of 59.0. Under 50 is contraction. The latest data pointed to a renewed contraction in business activity and the steepest since December 2025. New orders declined sharply, dropping 15.4 points, but still above April's low. The production gauge slipped 8.8 points, recording its first and sizeable contraction since last December. Meanwhile, supplier deliveries eased 2.6 points but remained in expansion for the 19th consecutive month.
Warsh: inflation has been over the Fed’s 2.0% for 5 years; overall commodity prices bears watching: doesn’t believe current rates are restrictive; Wall Street and main street resilient; Fed’s policy of forward guidance has lost its welcome; short term rates are predominant to the Fed’s monetary policy; Fed has more work to do on inflation; Warsh continued to say market participants should decide and not rely on the Fed’s forward guidance, what he has been saying since he took over last May, wants markets to lead; backward data should be less important than forward outlooks; Fed’s forward guidance may have led to the Fed’s slow response to the pandemic; the Fed’s target of 2.0% inflation is solid; economy is doing well; a quieter Fed makes the Fed more efficient; Fed’s policy is not restrictive; uncovential policy should be restricted to serious issues.
At 10 am the final University of Michigan consumer sentiment continues to weaken
PRICES @ 10:30 AM
10 year note: 4.69% +2 bp
5 year note: 4.44% +4 bp
2 year note: 4.30% +6 bp
30 year bond: 5.17% -2 bp
30 year FNMA 6.0: @10:30 am 101.27 -16 bp (-18 bp from 9:30 am yesterday)
30 year FNMA 5.5: @10:30 am 99.24 -210 bp (-20 bp from 9:30 am yesterday)
30 year GNMA 6.0: @10:30 am 101.55 -6 bp (unch from 9:30 am yesterday)
Dollar/Yen: 159.90 +0.51 yen
Dollar/Euro: $1.1611 -$0.0040
Dollar Index: 99.52 +0.35
Gold: $4,601 -$63.00
Bitcoin: 79,273 -657
Crude Oil: $82.82 -$0.71
DJIA: 53,612 +47
NASDAQ: 26,563 +22
S&P 500: 7741 +10
A quiet start this morning in the bond market.
The only data today, weekly jobless claims at 203K with estimates at 208K down 4K from the previous week. Continuing claims, a gauge of outstanding unemployment fell by 18,000 to 1,778,000 in the earlier period, also below expectations. The data extended the period of resilience in the US labor market despite the unexpected contraction in payrolls per the latest BLS data. Employment continues to impress as claims remain at or close to 200K for weeks. A month ago weekly claims fell to 189K the lowest in 60 years. Reaction to today’s claims pushed yields 1 bp higher than prior to 8:30 am ET.
The only thing scheduled the rest of the day is the $44B 7 year note auction at 1 pm.
Economists, bankers, media gathering today in Jackson Hole, Wyoming. There won’t be any news today but tomorrow at 10 am Kevin Warsh will speak. Warsh has said he wants the Fed to be less transparent letting markets decide the direction of rates with less input from Fed officials. He has also made it clear he wants inflation down to 2.0%. Yesterday the PCE core year/year inflation rate at 3.3%; the overall year/year 3.7%.
Kansas City Fed Jeffrey Schmid, host of the Jackson Hole gathering commented this morning he doesn’t see the current level of rates being restrictive on the economy and used the current definition of inflation as being “sticky”.
10 year note: 4.66% unch
5 year note: 4.38% +1 bp
2 year note: 4.22% unch
30 year bond: 5.18% +1 bp
30 year FNMA 6.0: @9:30 am 101.45 -1 bp (-4 bp from 9:30 am yesterday)
30 year FNMA 5.5: @9:30 am 99.44 -4 bp (-4 bp from 9:30 am yesterday)
30 year GNMA 6.0: @9:30 am 101.55 +1 bp (-1 bp from 9:30 am yesterday)
Dollar/Yen: 159.40 +0.09 yen
Dollar/Euro: $1.1652 -$0.0002
Dollar Index: 99.10 -0.06
Gold: $4,631.90 -$21.40
Bitcoin: 79,248 +790
Crude Oil: $82.66 +$0.43
DJIA: 53,468 +4
NASDAQ: 26,362 +231
S&P 500: 7703 +27
At 8:30 am ET July PCE inflation hit along with personal income and expenditures. PCE inflation essentially as expected, a slight increase in overall but the core, excluding food and energy, was dead on forecasts. Both personal income and spending were stronger than estimates.
Other data at 8:30 am, Q2 preliminary growth at 1.5% the same as the advance release a month ago. July durable goods orders better than estimates +1.1% with forecasts of 0.5%; core capital goods +0.2% with expectations at +0.9%, June core goods revised from +0.9% to +1.7%.
MBA mortgage applications last week were down 1.0% from the prior week. Purchase applications -0.3%, refinances -2.0%.
At 1 pm $70B 5 year note auction.
Supporting the view that inflation has moderated recently, crude oil prices are declining. Iran and Oman working on a deal to open the Strait of Hormuz.
Markets now await Fed chair Warsh on Friday morning. His keynote address at the Global Economic Forum should provide additional information for markets.
10 year note: 4.66% +3 bp
5 year note: 4.39% +5 bp
2 year note: 4.23% +4 bp
30 year bond: 5.19% +2 bp
30 year FNMA 6.0: @9:30 101.49 -11 bp (+5 bp from 9:30 yesterday)
30 year FNMA 5.5: @9:30 99.48 -17 p (+2 bp from 9:30 yesterday)
30 year GNMA 6.0: @9:30 101.56 -6 bp (+6 bp from 9:30 yesterday)
Dollar/Yen: 159.37 +0.15 yen
Dollar/Euro: $1.1658 -$0.0018
Dollar Index: 99.12 +0.20
Gold: $4,671.60 +$21.90
Bitcoin: 78,383 -552
Crude Oil: $81.08 -$1.27
DJIA: 53,571 -7
NASDAQ: 26,171 +20
S&P 500: 7684 +7
Yesterday the 10 year note slipped 3 bps, this morning at 8 am ET and down another 4 bps. Two factors putting a little support into treasuries, Treasury Department making a point that it can alleviate some of the stress on long term rates to combat the continuing increase in US debt using its $1 trillion from its general account. The other, crude oil continues to decline taking a little fear of inflation down a notch.
Tomorrow July inflation via the PCE (personal consumption expenditures), one of the Fed’s go to monthly inflation readings. The estimates are rather benign year/year but increase month/month. July personal income and spending also tomorrow.
Earlier this morning June Case/Shiller home price index from 20 cities; month/month expected +0.1%, increased 0.2%, year/year +2.1% against +1.7% expected and up from +1.6% in May.
At 10 am July new home sales, expected at 620K from 628K in June, sales reported 407K.
August consumer confidence from the Conference Board also at 10 am, index expected at 90.1 from 90.8 in July. The Conference Board Consumer Confidence Index decreased by 1.4 points to 90.8 in July, down from an upwardly revised 92.2 in June. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—fell by 3.6 points to 114.9, its third consecutive monthly decline. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—remained unchanged at 74.7. The survey period for this month’s preliminary results was July 1–22, encompassing ongoing conflict in the Middle East.
10 year note: 4.67% -3 bp
5 year note: 4.37% -4 bp
2 year note: 4.21% -2 bp
30 year bond: 5.20% -3 bp
30 year FNMA 6.0: @9:30 am 101.44 +16 bp (+20 bp from 9:30 am yesterday)
30 year FNMA 5.5: @9:30 am 99.46 +23 bp (+31 bp from 9:30 am yesterday)
30 year GNMA 6.0: @9:30 am 101.50 +10 bp (+13 bp from 9:30 am yesterday)
Dollar/Yen: 159.26 +0.16 yen
Dollar/Euro: $1.1669 +$0.0006
Dollar Index: 98.95 -0.05
Gold: $4,670.40 -$27.40
Bitcoin: 79,059 +314
Crude Oil: $82.40 -$2.61
DJIA: 53,442 +25
NASDAQ: 26,145 +169
S&P 500: 7675 +22
The buyers who stuck around are the real story
Realtor.com's Jiayi Xu walks us through this week's housing numbers, and the story underneath them is more interesting than the headline suggests.
Prices kept dropping compared to last year, the 31st straight week that's held true, with the median listing price down to $424,500 and price per square foot flat at $224, the lowest mark since spring. The obvious read is a market losing steam. But Xu points to something worth weighing against that: sellers have been pricing more realistically all year rather than chasing last summer's numbers.
A recent report from the company backs this up, showing that even as list prices fall, the median price buyers are actually clicking on and viewing has barely budged from a year ago. That gap does matter. It hints that the buyers still shopping right now aren't bargain hunters waiting out a crash. They're financially qualified people who know their budget and are sticking to it.
Inventory told its own story this week. Active listings climbed toward 1.2 million, the highest count since November 2019, proof that the pandemic-era shortage has largely worked itself out, though supply still trails pre-pandemic norms by a good margin. What's changed isn't just the quantity. It's the mix. Homes priced under $370,000 made up nearly half of all listings back in 2021. Today that share has slipped to 42.2%, according to Realtor.com's 2026 Housing Alignment Report. Entry-level inventory is quietly shrinking as a piece of the pie, even while overall supply grows.
Homes are also moving faster. Days on market held steady, still elevated compared to earlier this year and consistent with the usual late-summer slowdown, but the bigger story is the streak underneath it: 12 straight weeks now where homes have sold at the same pace or quicker than they did a year earlier. That run started in late May. Before that, going all the way back through late 2024, every single week showed homes selling slower than the year before, sometimes by more than seven days. That trend has fully turned around.
New listings pulled back again this week, marking the second consecutive week of year-over-year decline, though the drop was gentler than the week prior. Mortgage rates staying where they are deserves some of the blame here. Plenty of homeowners locked into lower rates years ago are still reluctant to give those up, and that hesitation keeps a real chunk of would-be sellers sitting it out. Year-to-date, new listings remain just a touch behind last year's pace.
Taken together, it's a market where more homes are for sale, buyers left standing are serious ones, and sales are moving quicker than they have in over a year, even as fewer new sellers step forward to join in.
Mortgage rates are getting some support today. The MBS market worsened by -32 bps last week. This was enough to increase mortgage rates or fees. The market experienced high volatility last week.
These are the things that have the greatest ability to impact rates this week. 1) Geopolitical, 2) Inflation and 3) The Fed.
1) Geopolitical: Oil prices will continue to garner a lot of attention from the long bond market as a tide that lifts all inflation boats.
2) Inflation: We get the Fed's key metric of inflation on Wednesday with headline and Core PCE.
3) The Fed: The 2nd half of the week will see the annual Economic Symposium in Jackson Hole, WY. This is actually an official FOMC meeting held by the St. Louis Fed. Fed Chair Warsh will speak Friday.
This morning markets are seeing a bounce back from last week's losses. Volatility has started high and could stay that way all week.
Bond markets began slightly better this morning but remain in the tight range. This week has two very key reveals, Wednesday July PCE inflation and Friday Fed chair Kevin Warsh will deliver the keynote address at the Global Economic Forum in Jackson Hole, WY.
The current plan for Iran is to increase sanctions. The new measures will add to an extensive sanctions already targeting Iran’s banking, energy, aviation and cryptocurrency sectors.
This week’s calendar:
Monday:
Nothing.
Tuesday:
$68B 2 year auction, June Case/Shiller home price index (20 city year/year 1.8% up from +1.6%), August consumer confidence index from the Confidence Board (90.1 from 90.8), July new home sales 620K from 628K).
Wednesday:
$70B 5 year note auction, weekly MBA mortgage application’s, 2nd look at Q2 GDP (1.5% unch from the advance release), July durable goods orders (month/month +0.5% from +0.3%), July personal income and spending (income month/month +0.2%, spending month/month +0.1%). July PCE inflation (month/month +0.1% from -0.1%June, year/year +3.6%% from +3.7%% in June; core month/month +0.2% from +0.1%, year/year core Unchanged at +3.3%).
Thursday:
$44B 7 year note auction, weekly jobless claims (208K from 206K).
Friday:
August Chicago purchasing managers index (59.0 from 57.6). University of Michigan final August consumer sentiment index (51.0 unch from mid-month).
10 year note: 4.70% -3 bp
5 year note: 4.40% -3 bp
2 year note: 4.23% -1 bp
30 year bond: 5.23% -4 bp
30 year FNMA 6.0: @9:30 am 101.24 -4 bp (-9 bp from 9:30 am Friday)
30 year FNMA 5.5: @9:30 am 99.15 -1 bp (-10 bp from 9:30 am Friday)
30 year GNMA 6.0: @9:30 am 100.37 -3 bp (-10 bp from 9:30 am Friday)
Dollar/Yen: 159.10 +0.16 yen
Dollar/Euro: $1.1670 -$0.0010
Dollar Index: 98.94 +0.14
Gold: $4,7231.40 +$50.80
Bitcoin: 78,612 +1276
Crude Oil: $85.74 -$1.32
DJIA: 53,444 +167
NASDAQ: 25,958 -222
S&P 500: 7650 -24