CHM Blog

Yesterday's FOMC meeting and Jerome Powell’s press conference went down with no change in markets, unusual that there was no volatility that usually accompanies the meeting. Powell at his press conference commented that the economy was in good shape presently, somewhat implying less need for a rate cut. His comment didn’t trigger traders to retreat from expectations of additional rate cuts this year however, nor did it further the rate cut outlook.

The big market movement yesterday was in gold prices, increasing $300.00 yesterday and early this morning up another $250.00. Since the start of this year the price of gold has increased $1,200.00. Gold price has been on a binge over the last year with not much chatter, now the focus has increased as the US dollar declines driven by more safety buying promising more reward than in treasuries.

Weekly jobless claims this morning at 209K against estimates of 205K, the previous week's claims were revised from 200K to 210K. Continuing claims fell by 38,000 to 1,827,000 in the prior week, firmly below market expectations of 1,860,000, to reflect the softest level of outstanding unemployment since September of 2024. Low-firing and low-hiring labor market, stabilizing since the marked softening in the fourth quarter of 2025 and aligned with the outlook of a lower labor demand and lower labor supply. Hard to make a case that unemployment is increasing, particularly with continuing claims continuing to decline.

The final Q3 2025 productivity and unit labor costs remained unchanged from the prelim release last month. Productivity +4.9% while unit labor costs declined 1.9%. November US trade deficit expected -$45.0B increased to -$56.8B.

This afternoon Treasury will complete this week’s borrowing with $44B of 7 year notes, Tuesday’s 5 year auction didn’t get much demand.

What is the betting line for another partial shutdown this Saturday? It is doubtful it will occur.

Crude oil price increasing this morning on news the US is sending an armada into the Iran area.

At 9:30 am ET the DJIA opened +79, NASDAQ -30, S&P +13. 10 year note 4.27% +2 bps. FNMA 5.0 30 year coupon -11 bps from yesterday’s close and -9 bps from 9:30 am yesterday; the 5.5 coupon at 9:30 am -5 bps from yesterday’s close and -2 bp from 9:30 am yesterday.

Traders no longer anticipating more rate cuts, equally not betting against the possibility, the economy is doing well according to Powell, inflation isn’t declining but not increasing. If there is a cut coming it is not likely until the June FOMC, too far out given the present uncertainties.

PRICES @ 10:00 AM

10 year note: 4.25% unch

5 year note: 3.82% unch

2 year note: 3.57% -1 bp

30 year bond: 4.88% +3 bp

30 year FNMA 5.0: @9:30 am 99.94 -11 bp (-9 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 101.39 -5 bp (-2 bp from 9:30 am yesterday)

30 year GNMA 5.0: @9:30 am 99.94 -5 bp (+9 bp from 9:30 am yesterday)

Dollar/Yen: 153.16 -0.27 yen

Dollar/Euro: $1.1968 +$0.0013

Dollar Index: 96.23 -0.22

Gold: $5,568.50 +$255.00

Bitcoin: 87,713 -1291

Crude Oil: $66.36 +$3.15

DJIA: 48,937 -79

NASDAQ: 23,524 -333

S&P 500: 6930 -48

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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MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.