|10 year government bond yield||2.48%|
|30 year fixed rate mortgage||4.22%|
Stocks are lower after Chinese stocks got rocked overnight. Bonds and MBS are up.
The Chinese stock market fell 6% overnight, perhaps on trade war fears. Trump tweeted about re-establishing Chinese tariffs next Friday, but Chinese media largely buried the story.
There isn’t much in the way of economic data this week aside from inflation data on Thursday and Friday. We do have a lot of Fed-speak though. The Fed has a communications issue, with the Fed Funds futures predicting a rate cut in 2019, while the debate internally seems to be between maintaining current policy and perhaps having to raise rates further. The Fed Funds futures are a bit of a mystery, given that economic data is nowhere close to recessionary. The consensus at the Fed seems to be wait and see, and aside from a few mentions of the Fed undershooting their inflation target, nobody seems to be pushing for rate cuts.
With Herman Cain and Steve Moore out of the picture, Donald Trump still has two seats to fill at the Fed. Former budget official Paul Winfree is being mentioned as a possible nominee.
The Spring selling season has not done much to increase mortgage banking jobs. In April, there were 318,000 people employed in the mortgage banking space, a drop of 4% from a year ago and a decline of 1% from the previous month. Separately, a shortage of construction labor is acting as a constraint on the homebuilding market. Much of the job decrease has been in the non-bank mortgage banking sector.