News You'll Use

Mortgage rates rose this week, as we saw stronger than expected data, along with Federal Reserve members pushing back on the markets expecting a rate cut in March. The thesis for the market expecting the Fed to cut rates in March is that there are expectations for the economy to materially weaken to the point that the Fed will need to cut rates by then. The issue with that thesis right now is that the data continues to be stronger than expected. The odds of a Fed rate cut in March have fallen to 55% and are expected to continue to fall if the data and the economy continue to be strong. At some point this year, the Fed will need to start cutting rates as they are restrictive. The question is when they will start the rate cutting process and how quickly they plan to cut. May or June seems more likely than March, just once the market prices that in more, rates could drift higher. Take advantage of any rally in rates that you see as rate volatility is likely.

• U.S. 10-year Treasury on Thursday afternoon is at 4.14%

• Empire Manufacturing came in lower than analyst's expectations (-43.7 vs expectations of -5.0).

• Retail Sales came in higher than analyst's expectations (+0.6% m/m vs expectations of 0.4% m/m).

• Housing Starts came in higher than analyst's expectations (1.460 mm starts vs expectations 1.425 mm starts).

• Building Permits came in higher than analyst's expectations (1.495 mm permits vs expectations 1.477 mm permits).

• Initial Jobless Claims came in lower than analyst's expectations (187k claims vs expectations of 205k claims).

• Mortgage Applications rose 10.4% this week