Heading into the week, market watchers knew (or thought they knew) that Friday’s PCE inflation data had a chance to help or hurt interest rates more than any other economic report.  When PCE came out higher than expected on Friday morning, market watchers knew (or thought they knew) what would happen next.  But instead, the opposite…

Interest rates improved fairly steadily throughout the week with the biggest drop seen after Wednesday’s Fed announcement. The Fed didn’t cut rates, nor was any rational person expecting them to at this meeting.  So why did rates move lower? First off, we have to specify the rates in question. The Fed only sets the Fed…

Rates rocketed lower with stunning consistency starting in late February. They finally bounced last week, but rather than move back up to previous levels, they held in a relatively narrow, sideways range. That set the stage for a showdown this week. OK, a “showdown” may be a bit dramatic, but it’s not an overstatement to…

There’s a lot for financial markets to digest at the moment. Over the past few weeks, the net effect of that digestion has been good for bonds/rates and bad for stocks. But the prevailing correlation broke down this week and few people in the U.S. truly understand why. That’s forgivable, considering there has been a…

Rates have been almost perfectly consistent in moving lower since February 13th and broadly consistent since January 15th. There’s one big reason for that and it’s simpler than you might think. We’ll set the stage with a quick look at Treasuries, which serve as a benchmark for other interest rates like mortgages. The chart uses “candlesticks”…

It ended up being another good week for rates with another Friday drop to the lowest levels in 2 months. Momentum shifted for the better after Wednesday’s Fed Minutes but accelerated quickly after Friday’s release of the S&P Services PMI–a broad index tracking business activity in the services sector. Weaker economic data tends to promote bond…

The final two days of the present week weren’t on many bingo cards as of Wednesday afternoon.  At the time, rates were jumping higher in response to inflation data.  That same morning, the Consumer Price Index (CPI) showed consumer inflation accelerating much faster than expected last month.  CPI is one of the most important economic…

It would be more than fair to expect elevated market volatility based on the quantity and tone of recent news headlines. But the market remains more focused on the hard data. This isn’t to say that tariff-related headlines have gone unnoticed, only that they’ve had a minimal impact in the bigger picture.  Traders are waiting…

 Jan 31, 2025 4:33 PM ET  Spoiler alert: no one really knows how tariffs are going to impact the market yet. Much is left to be decided, and the outcomes can vary depending on the details. Markets were certainly willing to react to tariff headlines this week with Thursday and Friday overshadowing Wednesday’s Fed announcement. In…

It turned out to be an intensely boring week for mortgage rates. The average lender stayed right in line with last week until moving slightly higher on Thursday and slightly lower on Friday.   This isn’t too much of a surprise. Rates are driven by bonds and bonds are most easily influenced by major economic reports–something…