CHM Blog

Last Friday’s August employment report on the labor markets proved employment is slowing. The unemployment rate increased to the highest level since 2021. The number of unemployed increased by 148 thousand to 7.384 million in the period. In turn, the labor force increased by 436 thousand to 170.778 million, driving the labor force participation rate to increase by 0.1% to 62.3%. The broader U-6 unemployment rate, which includes discouraged workers and those working part-time for economic reasons, rose to 8.1% from 7.9% in July. Other measurements of employment also have declined; JOLTS job openings declining, continuing unemployment claims increasing.

Friday the 10 year note -8 bps, the 2 year note -8 bps; FNMA 5.5 coupon prices increased 25 bps. For all last week, the 10 year declined 13 bps to the lowest since the beginning of May. Traders reacted, now believing the Fed is more likely to cut rates on the 17th and then again at the October FOMC meeting.

The economy is center-stage; inflation and slowing employment, but not too far in the wings is the US debt. Make no mistake, it isn’t out of the minds of investors that fund the deficit and now with the courts maybe forcing the US to return the tariffs the stress is increasing.

The DJIA opened a little weaker, NASDAQ slightly higher as was the S&P. 10 year at 9:30 am ET 4.05% -3 bp. FNMA 5.5 30 year coupon at 9:30 am +29 bp. (+7 bp from 9:30 am Friday)

The only data today, July consumer credit, +$10B.

PRICES @ 10:00 AM

10 year note: 4.05% -3 bp

5 year note: 3.56% -2 bp

2 year note: 3.49% -3 bp

30 year bond: 4.71% -5 bp

30 year FNMA 5.5: @9:30 am 101.28 +20 bp (+7 bp from 9:30 am Friday)

30 year FNMA 6.0: @9:30 am 102.54 +9 bp

30 year GNMA 5.5: @9:30 am 101.22 +14 bp (+5 bp from 9:30 am Friday)

Dollar/Yen: 147.68 -.28 yen

Dollar/Euro: $1.1751 +$0.0032

Dollar Index: 97.53 -0.24

Gold: $3,674.1 +$20.80

Bitcoin: 112,081 +824

Crude Oil: $62.09 +$0.22

DJIA: 45,343 -58

NASDAQ: 21,863 +162

S&P 500: 6496 +14

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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