Daily Rate Lock Advisory

Indexes Affecting Rate Lock

High

Positive

Fed Talk

Today’s only relevant event was Chairman Powell’s speech at the Fed’s annual Jackson Hole conference at 10:00 AM ET. He obviously gave the markets what they wanted to hear since both stocks and bonds are reacting strongly to his speech. Surprisingly strong in fact. He didn’t say anything that varied significantly from what we already knew. For example, statements such as "the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance" simply acknowledges that recent changes in economic data may force the Fed to cut key rates in the future. He didn’t even indicate when that may happen. Furthermore, he also said that inflation risks remain "tilted to the upside," reiterating that recent inflation data is concerning (which could prevent a rate cut).

High

Positive

Fed Talk

While his words didn’t really come as a surprise, the market’s reaction certainly did. A strong reaction to something new would have been expected. However, simply stating that future data will determine the Fed’s next move does not fall into the “New News” category. Keep in mind that the markets were heavily predicting a rate cut at September’s FOMC meeting before his speech. His words more or less acknowledged that it is possible they may act next month, but didn’t indicate it was a done deal or even highly likely. Other Fed members have spoken out on this matter this week, making it clear that they feel it would be premature to cut rates next month, needing more time is needed to see how tariffs will fully impact inflation.

Medium

Unknown

General Bond Trends

It seems like market participants wanted to find something to label as positive in his speech when the truth is that what he said really doesn’t change a thing regarding next month’s meeting. This raises the possibility that this morning’s rally may not be sustainable and that we could see some of it given back before the end of the day or early next week. In the meantime, this morning’s mortgage rates are reaping the benefit of the rally.

Low

Unknown

New Home Sales

Next week brings us a handful of economic reports, along with a couple of shorter-term Treasury auctions and a batch of Fed speeches. The markets will be focused on one particular economic report that will come late in the week, which is relied on by the Fed as their inflation gauge. It will draw more attention than any of the week’s other events since it is the last update of this data before the next FOMC meeting and could help solidify what the Fed does next month. The week starts light with the release of July’s New Home Sales report late Monday morning. Look for details on all of next week’s scheduled activities in Sunday evening’s weekly preview.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

Fed Talk

Fed Talk

General Bond Trends

New Home Sales

Float / Lock Recommendation