The Consumer Financial Protection Bureau has received more than 11,000 comment letters on its proposal on personal financial data rights, but banks say the agency should ensure that more fintech partners take on their fair share of the rule’s compliance burden.

There were reports of rates plummeting after new numbers Friday showed a notable drop in overall jobs but then moderating later in the day.

Inflation and housing affordability are the two top election-year issues among home buying consumers, according to a new report from Veterans United Home Loans.

Nine federal regulatory agencies are requesting comment on a rule that would create data standards for supervisory information collected and submitted to financial regulators.

The federal Project Fortress initiative provides defensive tools for banks. Community banking groups and regulators’ associations say small banks in particular need the free and accessible help.

Last year, a New Jersey federal court sided with LoanCare’s countersuit awarding it over $22 million in compensatory damages. Freedom was awarded $247,000 in damages.

Bonds Rapidly Repricing Reality After Jobs Report

Yes, today was “just one” jobs report.  And yes, there are many examples of subsequent reports signing a different tune in cases like this.  But today’s astonishingly large bond rally wasn’t only about today, nor was it only about this week.  Bonds are in the process of repricing an updated reality and correcting from the uptrend in rates seen in the first 4 months of the year.  This began as early as the month of May.  The past few weeks have put a bit of an exclamation point on the shift with inflation data leading the charge.  From there, the past few days have done the same via a combination of Powell stepping out of the market’s way and now today’s “food for thought” jobs data.  Bottom line: if inflation falls any more and if labor market trends continue at even a slow pace in the same direction, the Fed is behind the curve on cuts and the market is trading accordingly until the data says otherwise. 

Econ Data / Events

Nonfarm Payrolls

114k vs 175k f’cast, 179k prev

Unemployment Rate

4.3 vs 4.1 f’cast, 4.1 prev

Participation rate

up 0.1 (offsets U/E slightly)

Earnings

0.2 vs 0.3 f’cast/prev

Market Movement Recap

09:52 AM Huge rally after jobs data.  Finally settling down.  MBS up 3/8ths in 5.5 coupons and 5/8ths in 5.0 coupons.  10yr down 13.5bps at 3.843.

01:20 PM After initial consolidation, most of the gains are holding.  MBS up half a point and 10yr down 16bps at 3.82.

03:04 PM Best levels of the day apart from initial data volatility.  10yr down almost 18bps at 3.80.  MBS up over half a point.

The events of this past week serve as an exclamation point in one of the many sentences that tells the story of the big shift away from the generationally high rates seen at the end of 2023.  The story has had its ups and down since then, but it had been going fairly well for fans of low rates over the past 3 months. In fact, the last 3 months mark the first successful defeat of what had looked like yet another “false start” in the road toward lower rates.  Measured in terms of 10yr Treasury yields, long term rates have only made 3 attempts to drop more than half a percent since they began skyrocketing in 2022.  The first two attempts ultimately gave way to new highs.  If rates had moved just a bit higher a few months ago, it would have happened again. Zooming in on the past year, here’s a general breakdown of the key motivations for these swings: May through July could be described as cautiously optimistic due to well-received improvements in inflation data.  During this time, the Fed said it was feeling more and more confident about cutting rates, but that it could be patient due to a labor market that was still rather strong.  Similar sentiments were shared by the Fed as recently as this week, but that was before this week’s jobs report came out. Headline job creation (nonfarm payrolls) fell to 114k in July–well short of the forecast consensus of 175k.  In addition, the unemployment rate ticked up to 4.3% from 4.1% and wage growth fell to 0.2% from 0.3% with annual growth hitting pre-pandemic levels for the first time since stabilizing at long-term highs.

This is one of those weeks that stands a good chance of being looked back up as the moment where the clouds of indecision parted and true trends were confirmed.  Between Powell’s equivocal openness to “multiple cuts” in 2024 on Wednesday and this morning’s sharply weaker jobs report (something Powell didn’t even know about on Wednesday), the more aggressive rate cut narrative is quickly coming into focus.  There are still two CPI reports and another jobs report before the September Fed meeting.  If they don’t offer strong counterpoints to recent data, the rate cut cycle has not only begun, but it will likely involve a certain sense of urgency. 

Remember when Intel was “the cat’s meow” in the IT and chip world? Intel is laying off 15,000 to save $10 billion in costs. Big numbers… Sometimes you… feel like a number. Let’s look at some round numbers. If our industry does $1.5 trillion in business in 2024, that is an average of $6 billion in originations per day. If we do $1 trillion industry-wide, that is still $4 billion per day. What percent of that $4-6 billion a day is your company doing? There’s a lot of business out there! Numbers… The combined net worth of the Agencies (Fannie & Freddie) is north of $120 billion, yet the industry is once again dealing with an increase in the cost of doing business with Fannie Mae. (More below.) Numbers can make or break a company, or a family. Fractional home ownership appears to be in vogue, given prices. With mortgage rates elevated, home prices continuing higher since the start of the pandemic, and vacations expensive, the solution might be buying 1/6 of a house. (Today’s podcast is found here and this week’s is sponsored by Optimal Blue. Optimal Blue bridges the primary and secondary mortgage markets to deliver the industry’s only end-to-end capital markets platform, helping lenders maximize profitability and operate efficiently so they can help American borrowers achieve the dream of homeownership. Hear an interview with Zilker Media’s Nichole Williamson on developing branding and marketing for banks to bring their communications into the modern landscape.)