A glance at today’s economic calendar quickly reveals that Fed speeches are the only game in town in terms of scheduled events.  But what can the Fed say that we didn’t already hear from Powell on Wednesday, or 47 other times in other speeches over the past month? Maybe something, but probably nothing earth shattering.  Instead, the market is on the edge of its seat as it waits for breaking news from US/China trade talks this weekend.  Anticipation is greatly amplified by yesterday’s UK/US deal. It’s tricky business to clearly define a reaction function here (i.e. would bonds like higher tariffs due to the recession odds, or lower tariffs due to the inflation implications).  Just as the Fed can only conclude their mandates are in tension, so too is the bond market’s reaction function.  Thus, we’re left wait and see, because different investors will have different lines in the sand when it comes to which side of the function matters more.
Today’s chart isn’t necessarily related to today’s events/commentary.  Rather, it’s just a pertinent dynamic that continues playing out in the background.

Here’s something that our Fed can’t do anything about, inflation-wise: coconut prices have doubled due to extreme weather events. (More on weather and climate below.) The Federal Reserve doesn’t control U.S. property taxes either, and they’ve jumped an average of 10.4 percent between 2021 and 2023, with wide variations across the 50 largest metro areas, from just $1,091 in Birmingham to nearly $10,000 in New York City, according to a new LendingTree analysis. Homeowners now pay a median of $2,969 annually, with the sharpest increases seen in Tampa, Indianapolis, and Dallas, while Pittsburgh, Philadelphia, and Milwaukee saw the smallest hikes. Conference admittance prices are also on the rise. “Rob, are you hearing that non-MBA groups are giving out comp passes to their events because of the expense and lack of interest?” No comment. You’re better asking the organizations yourself. But yes, in general, many are back in the cost-cutting mode again, and the first to go are non-MBA, regional, and state events. Choose wisely! (Today’s podcast can be found here and this week’s are sponsored by HomeEQ, the fully digital HELOC from Arc Home, which empowers brokers to quickly provide borrowers with easy access to their home equity. Brokers can benefit from competitive compensation, along with comprehensive training and a complete marketing plan designed to help them re-engage former clients and grow their business. Hear an interview with Jeremy Potter and Paul Gigliotti from the Mortgage Innovators Conference on AI’s ultimate use-case for the industry and what it will free people up to do.)

Whether it’s today vs yesterday, or today vs the end of last week, the average top tier 30yr fixed mortgage rate is just a hair lower. Today’s improvement was arguably a byproduct of trade related headlines this morning. Specifically, some comments suggested this weekend’s negotiations between the US and China in Switzerland would merely be a starting point. As has been the case for most any other recent trading day, there were plenty of other headlines that may have had an impact, but the overall movement is so small that nothing really stands out.   Looking ahead, the bond market (and thus, rates) will likely be tuning into next Tuesday’s inflation data along with any substantive developments from the weekend’s trade negotiations (which would be a tall order since they don’t involve a meeting between Xi and Trump).

Local prosecutors are fighting the imposition of DEI, immigration, gender identity and abortion-related stipulations on grants meant to combat homelessness.

Company management touted its wins, including with total volume of $21 billion, the Redfin and Mr. Cooper purchases plus a record quarter for home equity.

The national median single-family existing-home price grew 3.4% from a year ago to $402,300, an analysis found.

The jobs report and FOMC meeting caused some movement but rates ended up where they started; but any unexpected news could result in swift changes either way.

The reverse mortgage division reported a loss due to hedging costs but on a net basis the company proved profitable ahead of peak market disruption in April.

“Why did the homeowner take so long in remodeling his home? He had trouble with da siding.” There are LOs, or correspondent investors, who have spent months or years building up their renovation referral book of business. I am sure that they saw this coming with the Trump tariff policies: A quarter of large renovation projects could be scrapped or considerably scaled back because tariffs make them cost-prohibitive, according to new research from Zonda. Meanwhile, Robbie Chrisman reports that Day #1 of the California MBA’s Mortgage Innovators Conference in Huntington Beach delivered a deep dive into how private equity is shaping the future of the mortgage industry, with leaders from Redwood Trust, Andromeda, and FundingShield highlighting capital’s growing role in innovation, risk management, and consumer experience. The afternoon pivoted to the power and pitfalls of AI, as panels and tech demos explored cutting-edge tools transforming lending operations, from compliance automation to borrower engagement. Sessions emphasized the urgent need for strategic implementation, regulatory alignment, and customer-focused tech to stay competitive in a rapidly evolving market, setting the tone for a high-impact, tech-forward year ahead. (Today’s podcast can be found here and this week’s are sponsored by HomeEQ, the fully digital HELOC from Arc Home, which empowers brokers to quickly provide borrowers with easy access to their home equity. Brokers can benefit from competitive compensation, along with comprehensive training and a complete marketing plan designed to help them re-engage former clients and grow their business. Hear an interview with Aidium’s Spencer Dusebout on how AI is transforming the mortgage industry, from redefining lead scoring and boosting CRM adoption to supporting, not replacing, loan officers, with a spotlight on the launch of innovative “Agents” designed to streamline workflows and enhance borrower engagement.)

Mortgage rates moved back up to the higher levels seen earlier this week after the official announcement of a trade deal between the U.S. and the U.K. Most lenders actually began the day fairly close to yesterday’s latest levels, but were ultimately forced to raise rates in response to weakness in the bond market.   The rationale for this market reaction can be debated. Some market watchers conclude that a trade deal is simply “good for stocks and bad for bonds” because it’s economically bullish. While that sentiment CAN account for some of the movement, it’s not the whole story. Bonds (which dictate rates) have specific concerns regarding inflation, foreign demand, and issuance needs. These are high level topics that are beyond the scope of a daily mortgage rate recap, but suffice it to say “rates have a lot on their minds” when it comes to how trade policy shakes out.  Unfortunately, it’s sort of a no win situation in the short term.  The only exception would have been a full exemption from tariffs. In the bigger picture, today’s mortgage rate increase is unremarkable–sort of average–and it leaves the rate index well below the early April highs, despite being well above the range seen during the month of March.