News You'll Use
This was a very busy week, heavy with economic data and Federal Reserve speakers. The highlight was Fed Chair Powell speaking on Wednesday and he indicated that the Fed would be slowing down the pace of rate hikes in their December meeting. His overall message was very similar to his past speeches but listening to the entirety of the speech, he was more nuanced than in his more recent speeches. It seems that they are getting close to the point in their rate hikes that they are happy with the level of where rates are and that the next phase will be watching how the economy and inflation data responds to the restrictive rates. The market really liked the message, and sent mortgage yields lower. Looking to next week, the biggest piece of data we will see is next Friday in PPI.
• U.S. 10-year Treasury is at 3.57% on Friday morning.
• FHFA House Price Index came in higher than analyst's projections (+0.1% MoM vs expected -1.2% MoM).
• S&P CoreLogic/Case-Shiller 20-City House Price Index was in-line with analyst's expectations (-1.24% MoM vs. expected -1.2% and 10.43% YoY vs. expected 10.55% YoY).
• Initial Jobless Claims came in lower than analyst's projections (225k vs. expected 235k).
• ADP Employment Change came in lower than analyst's projections (127k vs. expected 200k).
• Nonfarm payrolls came in higher than analyst's projections (263k vs. expected 200k), showed very strong Average Hourly Earnings (+0.6% MoM vs. expected +0.3% MoM), and unemployment rate was in-line with projections (3.7%).
• PCE Deflator, a measure of inflation that the Fed pays close attention to, came in lower than expected (0.2% MoM vs. expected 0.3% MoM).
• Mortgage Applications fell 0.8% this week.