January 28th, 2026 7:50 AM by Richard Sardella MLO.100007700/NMLS 233568
The FOMC meeting begins this morning, tomorrow the policy statement and Jerome Powell’s press conference.
ADP reported private jobs added an average of 7,750 jobs per week in the four weeks ending January 3rd, 2026, little changed from an average gain of 8,000 in the previous period, it was the seventh consecutive period that job growth increased. The employment situation is going better than what Powell and the Fed have been expecting, one reason there won’t be a rate cut tomorrow. Inflation is not slowing but equally not increasing much based on recent data. Trader are laser focused on how Powell sees it and what the takeaway will be after his press conference. Expect the policy statement to reflect a stronger employment and lower inflation outlook; Powell to sidestep a definitive outlook and for interest rates continuing to be “data dependent”.
Within the FOMC, members are spilt over whether the Fed should continue lowering the FF rate (short term rates) or hold steady. Within markets and data from the CME rate watch index continue to expect a couple more cuts this year. The CNBC Fed Survey out today see two more cuts this year and no more cuts in 2027. Improving GDP and labor market expectations are behind the firmer rate outlook. As for the replacement for Powell, most do not believe the new chairman will deliver the cuts that the President continues to push. The survey included 35 responses; GDP is forecasted to come in at 2.4%, and 2.2% next year, both higher than what the Fed has typically viewed as potential growth of the economy. The unemployment rate is seen rising just a tenth from the current level to 4.5% by year end and dropping slightly next year.
At 9:30 am the DJIA opened -329, NASDAQ +148, S&P +16. 10 year note unchanged at 4.22%. FNMA 5.0 30 year coupon at 9:30 am +10 bps from yesterday’s close and +18 bps from 9:30 am yesterday.
At 10 am the January consumer confidence index expected at 90.0 dropped to 84.5 but December confidence originally reported at 89.1 was revised to 94.2. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—dropped by 9.9 points to 113.7 in January. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell by 9.5 points to 65.1, well below the threshold of 80 that usually signals a recession ahead. The cutoff for preliminary results was January 16, 2026. All three Expectations Index components also weakened in January. Expectations for business and labor market conditions six months from now fell further into negative territory. The outlook for household incomes became less positive.
At 1:00 pm $70B 5 year note auction; yesterday’s 2 year auction saw very strong demand.
PRICES @ 10:00 AM
10 year note: 4.22% unch
5 year note: 3.82% unch
2 year note: 3.59% -1 bp
30 year bond: 4.82% +2 bp
30 year FNMA 5.0: @9:30 am 100.13 +10 bp (+18 bp from 9:30 am yesterday)
30 year FNMA 5.5: @9:30 am 101.40 -1 bp (+4 bp from 9:30 am yesterday)
30 year GNMA 5.0: @9:30 am 99.99 +6 bp (+10 bp from 9:30 am yesterday)
Dollar/Yen: 153.10 -1.10 yen
Dollar/Euro: $1.1951 +$0.0069
Dollar Index: 96.44 -0.60
Gold: $5,068.90 -$13.60
Bitcoin: 87,566 +45
Crude Oil: $61.14 +$0.51
DJIA: 49,045 -367
NASDAQ: 23,793 +193
S&P 500: 6978 +28
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.