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Market
Comment
Mortgage bond prices finished the week lower which put a little upward pressure on rates. We started on a negative note Monday, were slightly positive mid-week, and flat to end the week. European tariffs, stocks, and global economic uncertainty dominated headlines. The data showed solid economic growth with little price pressures. ADP weekly employment rose 8K vs 11K. Construction spending rose 0.5% vs 0.1%. GDP rose 4.4% vs 4.3%. Core PCE prices rose 0.2% as expected. Personal income rose 0.3% vs 0.4% and Spending rose 0.5% as expected. Consumer sentiment was 56.4 vs 54. Mortgage interest rates finished the week worse by approximately 1/8 of a discount point.
LOOKING
AHEAD
|
Economic
Indicator |
Release
Date &
Time |
Consensus
Estimate |
Analysis
|
|
Durable Goods Orders |
Monday, Jan. 26,
1:15 pm, et
|
Up 0.5%
|
Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates.
|
| FHFA House Price Index |
Tuesday, Jan. 27,
10:00 am, et
|
Up 0.4%
|
Moderately Important. A measure of single-family house prices. Weakness may lead to lower rates.
|
| Consumer Confidence |
Tuesday, Jan. 27,
10:00 am, et
|
90.1
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Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
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| Fed Meeting Adjourns |
Wednesday, Jan. 28,
2:15 pm, et
|
No rate changes
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Important. Few expect the Fed to change rates, but some volatility may surround the adjournment of this meeting.
|
| Trade Data |
Thursday, Jan. 29,
8:30 am, et
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$44.6B deficit
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Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates.
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| Final Q3 Productivity |
Thursday, Jan. 29,
8:30 am, et
|
Up 4.9%
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Important. A measure of output per hour. Improvement may lead to lower mortgage rates.
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| Producer Price Index |
Friday, Jan. 30,
8:30 am, et
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Up 0.2%,
Core up 0.3%
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Important. An indication of inflationary pressures at the producer level. Lower figures may lead to lower rates.
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NY Fed President
Federal Reserve Bank of New York President John Williams stated in December “that despite all the uncertainty posed by trade policy and geopolitical events, the U.S. and global economies showed considerable resilience, continued to grow, and were poised to gain steam in 2026.” He gave additional insight this month which noted, “the economic outlook is favorable. GDP growth looks to have been somewhat above 2 percent last year, and it will likely pick up some this year. Although the labor market cooled over the past couple of years, I expect that we’ll see it stabilize this year and then strengthen somewhat thereafter. Inflation appears likely to peak sometime in the first half of this year as the full effects of tariffs are felt and then will be poised to move back toward the FOMC’s 2 percent longer-run goal.” On the inflation front, Williams said, “expectations remain well anchored. The New York Fed’s Survey of Consumer Expectations (SCE) shows that although short-term expectations have moved up somewhat, medium- and longer-term expectations remain well within their pre-Covid ranges. Most other measures of longer-run inflation expectations tell the same story. This is something I watch closely, because well-anchored expectations are critical to ensuring low and stable inflation.”
Importantly, he reinforced the fact that “there is always uncertainty when looking into the future, so I’ll remain data dependent as the year takes shape.”
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