In a weekly comparison, Mortgage rates are modestly higher this afternoon compared to last Wednesday. However, in a slightly bigger picture, rates can best be thought of as flat since they leveled off in late April after falling from longer-term highs for much of the month.
In other words, we survived the first major rate hike after Covid in early 2021 and now we are waiting to see where the next big swing will take us. Generally speaking, if the incoming economic data is much stronger than expected, the next rate hike is more likely “up”. This is a very basic principle that course observers need to understand, and things are seldom so neat and logical.
In the current case, not only the data would have to be stronger than expected, but that performance would have to be sustained for weeks or months to really get the bond market to move towards significantly higher rates. But such journeys certainly have starting points, and we are just now Got into a timeframe where it’s not completely crazy to look for clues. One of the most popular references on the market comes in the form of the government’s official job directory (The Employment Situation, better known as “The Job Report”) every first Friday of the month.
Bottom line: While this Friday’s labor market report has some potential to cause less rate volatility (for better or for worse), it will take a concerted effort from several economic reports before we finally break out of the current sideways pattern.