The October rate cut by the Feds was completely overshadowed by Powell’s follow-up comments. He essentially said, “Okay, okay here’s your rate cut… but don’t get used to it.”

Naturally, the market didn’t love that, and mortgage rates actually moved higher afterward.

This time around, the January rate cut is looking less likely, which means the market may take it more positively. When expectations drop, rates tend to behave better so we could see a more favorable reaction this round.

The JOLTS Job Openings and Labor Turnover Report, the ADP employment data, and tomorrow’s 10-year Treasury auction could all provide support for the bond market, especially as the employment landscape continues to show signs of weakening.

Rates are holding, just holding but tomorrow may show signs of improvement.

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