Indexes Affecting Rate Lock

High

Negative

Tariff News

The big news driving trading this morning is the trade agreement with China that drops the tariffs on both countries significantly from current levels. It is not a surprise stocks are rallying and bonds are posting losses on the news. The astronomical tariffs were thought to likely drive the U.S. economy into a recession. Lowering those tariffs eases the recession concerns. That said, the markets seem to be overreacting to the announcement. It is important to note that this is only 90-day temporary reprieve, not permanent. Furthermore, the revised lower tariffs are still much higher than they were before the trade war began. While the announcement is a step in the right direction, it doesn’t put a finality to the subject. Therefore, don’t be surprised to see bonds recover some of this morning’s losses and stocks pull back a little before the end of the day.

High

Unknown

None

There is no relevant data set for release today. This morning’s movement in the markets is being fueled entirely by tariff news. The rest of the week brings us six monthly economic reports for the markets to digest, three of which are considered to be extremely important and potential market movers. Around those reports is an abundance of Fed speeches that may come into play also. We could see multiple days with a noticeable change in rates, possibly intraday revisions also.

High

Unknown

Consumer Price Index (CPI)

Tomorrow begins this week’s calendar with the 8:30 AM ET release of April's Consumer Price Index (CPI) that measures inflationary pressures at consumer level of the economy. These results are watched closely because rising inflation makes long-term securities, such as mortgage-related bonds, less attractive to investors and causes the Fed to be reluctant to start lowering key short-term interest rates again. Both the overall reading and the more important core data that excludes volatile food and energy costs are expected to rise 0.3%. They are predicted to fall modestly on an annual basis. Favorable news for bonds and mortgage rates will be readings that indicate inflation was softer than thought.

Medium

Unknown

Fed Talk

In addition to this week's data, we have quite a large number of Fed-member speaking appearances scheduled. There are multiple speeches being made most days and Fed Chairman Powell is involved in one early Thursday morning. These speeches often are about mundane topics, but sometimes they involve discussions about the economy, inflation and how the Fed reacts to those matters. Any surprise comments, particularly about the Fed's thoughts on tariff impacts and future plans with key interest rates, could cause a strong reaction in the financial and mortgage markets. With so many scheduled this week, don't be surprised to see an intraday reaction in the bond market at least one day.

High

Unknown

Retail Sales

Overall, tomorrow is the most important day of the week for rates due to the significance of the consumer inflation readings, but Thursday’s wholesale inflation and consumer spending data could also cause a big change in rates that day. The calmest day may be Friday. If still floating an interest rate and closing in the near future, it would be prudent to keep an eye on the markets as we should see plenty of movement in them and mortgage rates this week.

Hale Realty

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

Tariff News

None

Consumer Price Index (CPI)

Fed Talk

Retail Sales

Float / Lock Recommendation