Mortgage bond prices finished the week lower which put upward pressure on rates. Rates worsened Monday through Wednesday with a slight rebound Thursday and Friday mornings. The Fed continued their MBS purchases, but they only buffered the selling pressure. The data was mixed but some of it showed economic strength. The FHFA house price index rose 0.9% vs the expected 0.2% decline. New home sales were 901K vs 787K. Consumer confidence was 84.8 vs 93. Durable goods orders rose 11.2% vs the expected 4.3% increase. Weekly Jobless claims were 1.006M vs 1.05M. Q2 GDP fell 31.7% vs the expected 32.5% decline. Core PCE inflation rose 0.3% vs 0.5% which was good news Friday morning. Mortgage interest rates finished the week worse by approximately 1/4 to 3/8 of a discount point.


Economic IndicatorRelease Date & TimeConsensus EstimateAnalysis
ISM IndexTuesday, Sept. 1,
10:00 am, et
54.4Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates.
ADP EmploymentWednesday, Sept. 2,
8:30 am, et
900KImportant. An indication of employment. Weakness may bring lower rates.
Factory OrdersWednesday, Sept. 2,
10:00 am, et
Up 5.5%Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
Fed “Beige Book”Wednesday, Sept. 2,
2:00 pm, et
NoneImportant. This Fed report details current economic conditions across the US. Signs of weakness may lead to lower rates.
Weekly Jobless ClaimsThursday, Sept. 3,
8:30 am, et
1MImportant. An indication of employment. Higher claims may result in lower rates.
Q2 Revised ProductivityThursday, Sept. 3,
8:30 am, et
Up 7.1%Important. A measure of output per hour. Improvement may lead to lower mortgage rates.
EmploymentFriday, Sept. 4,
8:30 am, et
Payrolls +1.4M
Very important. An increase in unemployment or weakness in payrolls may bring lower rates.

“Following an extensive review that included numerous public events across the country, the Federal Open Market Committee (FOMC) on Thursday announced the unanimous approval of updates to its Statement on Longer-Run Goals and Monetary Policy Strategy, which articulates its approach to monetary policy and serves as the foundation for its policy actions. The updates reflect changes in the economy over the past decade and how policymakers are taking these changes into account in conducting monetary policy. The updated statement is also intended to enhance the transparency, accountability and effectiveness of monetary policy.”

The most significant component that influences the mortgage-backed securities market was the inflation guideline. “In order to anchor longer-term inflation expectations at this level, the Committee seeks to achieve inflation that averages 2 percent over time, and therefore judges that, following periods when inflation has been running persistently below 2 percent, appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time.”

Analysts debated future ramifications. Chair Powell attempted to provide clarity by stating the change “reflects our view that a robust job market can be sustained without causing an outbreak of inflation.” That could be good news for low rates the remainder of this year.