Mortgage News

NVIDIA now represents 7.68% of the S&P 500, the largest single weighting in the index. Expectations for their earnings are set extremely high.

If they deliver a strong beat, equity markets could rally further, with some capital flowing out of the bond market.

Conversely, if NVIDIA falls short of expectations, equities could pull back, prompting investors to rotate into bonds, helping drive interest rates lower.

NY Fed President John Williams says we are too restrictive by 0.875 indicating he is up for 3 rate cuts this year.

Personal Consumption Expenditures – PCE the Feds preferred measure if inflation will be released Friday.

Between NVIDIA’s earnings and the upcoming PCE report, the bond market could move in either direction. If you’re currently floating but like the rate you see, it may be wise to lock now.

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In every gathering there’s that moment when the cake is cut and everyone glances around. A pause hangs in the air. Do you take the first piece? Do you wait politely?

Eventually someone makes the move, and suddenly it’s no longer awkward, it’s just cake being eaten.

Now think about the Fed and rate cuts. They’re standing over the cake. Everyone sees it, everyone wants a slice, markets, borrowers, politicians. But hesitation is real.

Once you cut that first piece, expectations change. Cut too early, and you look greedy, reckless. Wait too long, and the cake gets cold, or worse, someone else defines the moment for you.

This is the “Monster in the Math”, the uncertainty baked into every economic model. Growth slowing, inflation cooling, jobs weakening… none of it ever adds up neatly. The Fed knows once they take that first slice, it sets the pace for everything that follows.

The Feds are cutting the cake. Get ready for the ride to start.

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Consumer spending drives 68% of GDP, which means the economy lives and dies by how confident people feel about their wallets. The catch is, it’s not just about the money in their accounts, it’s the sense of wealth.

When people feel richer, they splurge. When they feel squeezed, they cut back fast. That psychology is the Fed’s biggest blind spot: they track the numbers after the fact, while the spending mood can change overnight.

Existing home sales rose 2% in July to a 4.01M unit annualized pace, well above expectations of just 0.5%. Some genuinely good news in housing.

My thoughts:

Powell spoke today, and appeared to give the green light on cuts. He noted the downside risk of employment. We are all collectively crossing our fingers that it will have a positive impact on mortgage rates.

Time to apply for that new home http://www.YourApplicationOnline.com Soft Credit pull.

Today starts the three day Jackson Hole Meeting where central bankers from around the world speak. Powell talks Friday at 10am ET.

Later today, we’ll see a 20-year bond auction, a routine event, but one worth watching. The key factor is demand: strong demand pushes bond yields lower, and mortgage rates typically follow suit.

Q3 GDP outlook is all over the map, with estimates ranging from -0.3% to 2.3%. The wild card? Trade and tariffs, and how they ultimately shake out. A weaker GDP print would put added pressure on the Fed to cut rates.

One of the biggest criticisms of Powell is his obsession with being “data dependent.” The problem is that economic data, by definition, is backward-looking. Relying on it to make forward policy decisions is like trying to drive while staring only through the rear-view mirror, you see where you’ve been, but not where you’re going. By the time the Fed reacts, the road ahead has often already changed.

My take:

The job market right now is essentially treading water, neither adding nor subtracting in any meaningful way. That’s a sharp contrast from just a few years ago, when employers were competing aggressively for new hires. The real concern going forward is whether we start to see the employment pool shrink, which would signal a much deeper shift.

Its time for the FED to turn around and look through the windshield.

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Even though multi-family housing fell 3%, single-family permits were on the rise. Anecdotally, it makes sense, you’ve probably noticed the surge of apartment complexes and other multi-family projects that have gone up over the past five years.

Home completions rose 6%, with most of the gains once again coming from single-family homes.

The market is sitting on enormous pent-up demand, with buyers and sellers alike sidelined by higher interest rates. The dam is going to break and we believe it’s going to be sooner rather than later.

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It’s a big earnings week ahead and our first real look at inflation. Up to now, producers and retailers have been quietly swallowing the costs of tariffs, but that’s not a diet they can stay on forever.

The increases we’re seeing are real, though still less dramatic than what the media (and admittedly, myself) have been bracing for.

10y and 30y bonds are holding steady, keeping rates in place for now. However, upcoming earnings reports could inject real volatility into the market. We’re leaning toward a lock position but holding off on pulling the trigger just yet.

We anticipate a 25bp rate drop from the FEDs in September but will know at Fridays Jackson Hole Symposium with Fed Chair Powell speaking.

Have a fantastic week, lets get you pre-approved and ready to role.

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Chicago Fed President and voting member says we shouldn’t overreact to yesterday’s PPI inflation numbers, better to “wait for more data” to see a trend.

Sound familiar? It should. Powell’s been singing that same “wait for the data” tune for four years now. At some point, this isn’t patience, it’s Analysis Paralysis. And the enemy isn’t the inflation trend, it’s the endless waiting.

Same chorus from St. Louis Fed’s Musalem, Richmond Fed’s Barken, and the rest of the Fed echo chamber, don’t overreact, just “wait for more data.”

The clock is ticking on the Fed’s Achilles’ heel: stagflation, persistent high inflation with slowing employment. It’s the no-win scenario they hope you don’t talk about, because there’s no playbook that ends well.

More homes on the market but with rates still elevated, they are not moving as quickly as we thought.

Sorry for the Friday rant. Have a fantastic rest of your day and weekend.

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CNBC and FOX Business are buzzing about a “whopping” PPI jump but let’s unpack where that number actually came from, and why it’s showing up here before it hits the Consumer Price Index.

The last four months have been very tame for PPI and CPI even in the flood of Tariff and Tariff threats. But why? Well the ships from other countries take weeks to travel, those are not subject to new Tariffs as well as the influx of orders back in March and April to counter Tariffs.

The chickens have come home to roost — tariffs are making their way through the system exactly as expected. The Producer Price Index (PPI) measures costs at the production level, not for consumers. As these higher producer costs filter through, we can expect CPI inflation to rise in the next month or two.

How does this affect rates?

We lost some ground on interest rates today but not too much. The stock market also responded but all in all a bit muted.

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Treasury Secretary Scott Bessent suggested yesterday that the Fed should consider a 50bp “catch-up” cut, a move that would be welcome news for interest rates.

Currently, there are 11 candidates in the running for Fed Chair, with Fed Governor Chris Waller leading the pack. Waller is notably bullish on rate cuts, and we’re optimistic about what that could mean for the market.

I hopped off a webinar yesterday about the new Trigger Lead bill that just passed, set to take effect in six months. This is a big win for consumers, finally putting a stop to the barrage of unwanted calls after applying for a loan.

But what really caught my attention was the shift in energy in our industry. With rates dropping and the possibility of even deeper cuts ahead this year, there’s a new momentum building, and it’s exciting to watch.

If you haven’t already, now’s the perfect time to get financially tuned up and ready, whether you’re buying, selling, or refinancing. The shift is coming, and we want to make sure you’re ahead of the game.

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The Consumer Price Index (CPI) showed overall inflation rose 0.2% in July, while the year-over-year rate held steady at 2.7%. Both came in right on target with expectations, giving the Fed more reason to consider cutting rates in the near future.

Home Price Index showing a slight increase in value of 0.06%. Less appreciation but is regionally impacted.

Rates holding their ground. We expected a more rate positive response to the inflation numbers.

Big changes are coming to the “trigger lead” practice that’s been plaguing borrowers—from auto loans to mortgage applications. A trigger lead happens when the three credit bureaus sell a borrower’s basic data to the open market, leading to a flood of unwanted calls and texts.

A new bill slated to pass will prohibit this practice. A huge win for everyone.

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