MARKET UPDATE: Things Just Got Serious

We may look back and say this was the week where a true downward trend began. 

ANALYSIS

What a week. It started with Chair Fed Powell speaking in fairly measured terms about the potential for rate cuts later this year.

Markets took it to mean cuts were the default plan and we saw some modest rate improvement.

Why not a bigger drop? Markets still needed some hard data to confirm their suspicions...and today they got it.

The big jobs report missed big. And in a very good way for rates.

Hiring slowed to 114,000 jobs last month, significantly below expectations. 

While unemployment rose to 4.3% - its highest level in nearly 3 years.

Bonds rallied and rates dropped. Hallelujah.

WHAT'S NEXT

Bottom line: If inflation falls any further and the labor market weakness accelerates, then the Fed could be behind the curve. 

This would mean more aggressive and faster rate cuts. Stay tuned...

And that is it for this week. Please keep me in mind for client's looking for a knowledgeable lender that is hungry and puts in the work. 

Have a great weekend!