Today’s Jackson Hole speech gave Fed Chair Powell an opportunity to adjust his stance in light of much weaker jobs report that came out 2 days after the last Fed meeting. Powell had quite a bit to say, but the only thing the market really needed hear in order to facilitate a reaction was that the balance of risks may warrant adjusting policy. A close second was that tariff-driven inflation was unlikely to be a lasting dynamic given the downside risks to the labor market. Bonds rallied instantly on the release of the speech with short-term yields logically leading the way (due to their closer connection to Fed rate expectations). September rate cut odds moved back to the 90%+ levels seen earlier this week. 10yr yields are back in the middle of their August range and MBS are back near 2025’s highs.

A few years back someone told me, “Two lenders merging in this environment is like two drunks outside a bar holding each other up.” That isn’t quite the case anymore for various reasons (we’re just one big announcement away from yet another block buster strategic deal, right?), not the least of which is certain companies are expanding while talented individuals are looking. I received a note from the head of HR at a well-known lender asking me about people looking. I pointed him to the Chrisman Job Board where job seekers can join the Talent Community for free, and employers can easily add a job listing or forward the listing to the team and they’ll take care of it for you. Do you think your company is going to last forever, like Kikkoman Soy Sauce or the Lowenbrau Brewery? Think again. Here’s a little trivia question for tonight’s happy hour. At its peak in 2004, this company had 9,094 locations. Today, 21 years later, it has just one, in Bend Oregon… This isn’t a contest; don’t write with answers please. (Today’s podcast can be found here and this week’s is sponsored by FirstClose. FirstClose provides fintech solutions to HELOC and mortgage lenders nationwide, increases profitability, and reduces costs for mortgage lenders through systems and relationships that enable lenders to assist borrowers more effectively and ultimately shorten closing times. Hear an interview with ThoughtFocus Build’s Bradley Clerkin on AI scalability in the mortgage industry, highlighting the shift from basic AI functions to agentic AI with background workers.)

Lagging tech adoption, issues with credit, and originators’ rush to close refinances earlier this year contributed to deterioration, a study found.

Trump has yet to decide when Fannie Mae and Freddie Mac will return to the market in an IPO that regulator Bill Pulte says could top $1 trillion.

Two Harbors’ agreement with Pine River resolves a case over wrongful termination that the REIT was already found liable for by a federal court.

The 30-year fixed rate mortgage ended the week unchanged as the 10-year Treasury ended Wednesday about 5 basis points higher than seven days before.

The giant lender and servicer which acquired Home Point Capital in 2023 did not say whether it would still pursue damages in the repurchase dispute.

Some Headwinds Ahead of Powell’s Jackson Hole Speech

Thursday brought the week’s only relevant econ data with 3 occasional market movers on tap.  Their results were mixed, but the important development was that the inflation components of the Philly Fed and S&P PMI data agreed that price pressures are alive and well. This made for a weaker start during the AM hours and that weakness was exacerbated by comments from Fed’s Hammack (who said current data doesn’t justify a September rate cut). A super strong 30yr TIPS auction at 1pm helped push back just a bit (which is quite remarkable as this essentially never has an impact). In the bigger picture, bonds could still be classified as drifting sideways to slightly weaker in a narrow range. Friday morning’s speech from Fed Chair Powell isn’t guaranteed to cause volatility, but it’s the week’s only true top-tier event in terms of volatility potential.

Econ Data / Events

Continued Claims (Aug)/09

1,972K vs 1960K f’cast, 1953K prev

Jobless Claims (Aug)/16

235K vs 225K f’cast, 224K prev

Philly Fed Business Index (Aug)

-0.3 vs 7 f’cast, 15.9 prev

Philly Fed Prices Paid (Aug)

66.80 vs — f’cast, 58.80 prev

S&P Manufacturing PMI

53.3 vs 49.5 f’cast, 49.8 prev

S&P Services PMI

55.4 vs 54.2 f’cast, 55.7 prev

Market Movement Recap

08:37 AM MBS are now down only 1 tick (.03) and 10yr yields are close to unchanged at 4.296 after being over 4.315 just before the data.

09:03 AM 10yr yields are back up to 4.312 (up 1.8bps on the day) and MBS are down 3 ticks (.09) on the day.

09:52 AM Weakest levels after PMI data.  MBS down an eighth and 10yr up 3.3bps at 4.328

11:22 AM MBS down 5 ticks (.16) on the day 10yr yields up 4.5bps on the day at 4.35. Fed’s Hammack comments are the driver of the most recent weakness

01:11 PM Some resilience after strong 30yr TIPS auction (never have we ever seen a 30yr TIPS auction move the market).  10yr up 3.4bps at 4.329 and MBS down 3 ticks (.09).

In a world (like this one) where mortgage rates are dictated by bond market movement and where bonds take cues from certain economic reports, weeks like this one can be frustrating or boring.  Until today, there haven’t been any actionable economic reports to inspire a bond market reaction. Unfortunately, today’s data was relatively unfriendly for rates, primarily due to inflation implications in two separate reports (Philly Fed Index and S&P PMIs). Bonds also care about comments from Fed speakers and there were headwinds on that front as well with the Fed’s Beth Hammack saying the data don’t currently support a rate cut at the September meeting. On a positive note, the damage to the bond market was minimal in the bigger picture. Thus, the impact on average mortgage rates was also minimal. While it’s true that today’s rates are the highest in nearly 3 weeks and 0.09% higher than the recent lows, it’s also true that, apart from those 3 weeks, these are still the lowest rates since October 2024 and 0.13% lower than July 31st. [thirtyyearmortgagerates]

After sliding back in June, existing-home sales picked up in July. The latest update, released August 21, shows a modest rebound. Sales rose 2.0% to a seasonally adjusted annual rate of 4.01 million are now 0.8% higher than a year ago. As has been and continues to be the case, zooming out on the same chart puts things in the most accurate perspective for the home resale market. Sales levels have hovered near 75% of pre-pandemic norms for three years now. NAR’s Chief Economist Lawrence Yun noted that slightly better affordability and stronger wage growth are giving sales a lift, with buyers also benefiting from more choices in the market. He added that many areas are seeing near-flat price growth, with some regions experiencing outright price declines. Even so, homeowners remain in a strong position, with a cumulative 49% increase in typical home values since mid-2019. Distressed sales remain at historic lows, and inventory has climbed to its highest level since May 2020, offering buyers their best negotiating position in years. Regional Breakdown (Sales and Prices, July 2025)

Region
Sales (annual rate)
MoM Change
Median Price
YoY Change

Northeast
500k
+8.7%
$509,300
+0.8%

Midwest
940k
-1.1%
$333,800
+3.9%

South
1.805m
+2.2%
$367,400
-0.6%

West
720k
+1.4%
$620,700
-1.4%