CHM Blog

The only data today, MBA mortgage applications. Applications rose by 1.1% from the previous week for the period ending May 9th, slightly extending the 11% jump from the prior period. Applications for a mortgage to buy a new home rose by 2.3% from the previous week. In turn, applications for a contract to refinance a mortgage eased by 0.4% from the previous week.

Chicago Fed President Austan Goolsbee echoed what Powell said last week that the Fed needs more data and time to assess the tariff impact on the US employment and inflation. Keeps the question up in the air, will the Fed wait too long to adjust interest rates as it did in 2023? Yesterday April CPI increased 2.3%, less that forecasts; smallest annual increase in four years, but the headline number was held down by falling food prices, which can be volatile from month to month. Core inflation (less food and energy) at 2.8% unchanged from March and the lowest since spring of 2021. Goolsbee remarked “There are moments of a lot of dust in the air,” Goolsbee said on NPR’s Morning Edition radio show. “We’ve got a bunch of noise ... We’re trying to figure out the through line.” “It’s just, I think, not realistic to expect businesses or central banks to be jumping to conclusions about long-term things when you’ve got so much short-term variability. That’s just a very difficult environment.”

Tomorrow Jerome Powell is speaking at 8:40 am ET at the Thomas Laubach Research Conference, we expect the same remarks he made at the FOMC meeting and what Goolsbee said this morning.

Tomorrow beside Powell there are key data points; weekly jobless claims, April producer prices (PPI), April retail sales. Recent data still holding well but traders and investors, as well as the Fed nervous about the moths ahead as more tariffs kick in. Markets were impressed with the conciliation between the US and China but what we need are announcements of deals with Japan, South Korea, India and the EU. What we have are lots of comments that negotiations are proceeding. Trump needs to get agreements quickly to keep markets and the central bank from excess speculation.

At 9:30 am the DJIA opened +72, NASDAQ +68, S&P +13. 10 year at 9:30 am 4.49% +1 bp. FNMA 6.0 30 year coupon at 9:30 am -2 bps from yesterday’s close and -18 bps from 9:30 am yesterday.

In the absence of any surprising news, we are expecting another quiet session ahead of Powell tomorrow and key economic releases.

PRICES @ 10:00 AM

10 year note: 4.48% +1 bp

5 year note: 4.11% +1 bp

2 year note: 4.02% unch

30 year bond: 4.94% +3 bp

30 year FNMA 6.0: @9:30 am 100.67 -2 bp (-18 bp from 9:30 am yesterday)

30 year FNMA 6.5: @9:30 am 102.46 unch (-12 bp from 9:30 am yesterday)

30 year GNMA 6.0: @9:30 am 100.67 -7 bp (-17 bp from 9:30 am yesterday)

Dollar/Yen: 145.86 -1.61 yen

Dollar/Euro: $1.1235 +$0.0048

Dollar Index: 100.58 -0.42

Gold: $3,190.40 -$57.40

Bitcoin: 103,730 -1118

Crude Oil: $63.25 -$0.42

DJIA: 42,152 +8

NASDAQ: 19,034 +24

S&P 500: 5885 -2

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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