The Consumer Financial Protection Bureau is appealing a lower court ruling that found the agency exceeded its authority in bringing an anti-discrimination enforcement action against a Chicago mortgage lender after he made disparaging remarks about Blacks and Hispanics.

Remote work trends and high interest rates have substantially reduced the values of U.S. office buildings. A new academic paper estimates the extent of the deterioration, suggesting that there is perhaps more stress ahead for banks than is widely anticipated.

Both past and present customers were impacted by the data breach.

Lawyers for the plaintiff maintain the companies should have been on notice of inadequate security measures after a reported data breach in 2022.

A cyber attack in late 2021 affected over 4 million consumers across three companies.

As of last Thursday, the average top tier 30yr fixed mortgage rate was a few days away from being able to claim an official “7 month low,” and that’s REALLY splitting hairs.  Today’s rates are only microscopically higher.  In fact, it would be more accurate to think of Friday and today as being a sideways extension of the long-term lows achieved last Thursday. For the average lender, that results in a 30yr fixed rate just under 6.7%.  With the exception of the past 2 days, that would officially be a 7 month low. [thirtyyearmortgagerates] Little–if anything–happened to create any meaningful movement in the underlying bond market.  Treasury yields have also flat-lined since last Thursday afternoon.  Financial markets will now be waiting until the first week of January for the next piece of economic data that could truly be considered “top tier” (a description that arguably only applies to the jobs report and the Consumer Price Index these days).   This isn’t to say that rates can’t experience volatility between now and then, but surprises in the data would likely be required in order for rates to move more than .15-.20% over the next 2 weeks.

Uneventful!

Through the 3pm CME close, today’s trading volume in longer term Treasuries was the lowest in months and one of the lowest non-holidays of the year.  There were several Fed speakers making the rounds and several of their comments seemed like the sort of thing that might get the market’s attention, but there was no discernible reaction.  Bonds began the day sideways, lost some ground early in the session for unknown reasons (could be Europe, oil prices, or year-end positioning), and stayed almost perfectly flat for the rest of the day.  There will be more economic data as the week progresses, but fewer traders left in the office to react.

Econ Data / Events

NAHB Builder Confidence

37 vs 36 f’cast, 34 prev

Market Movement Recap

12:13 PM roughly unchanged overnight and slightly weaker into the 10am hour.  Leveling off since then.  10yr up 4.3bps at 3.958.  MBS down 3 ticks (.09).

02:30 PM Flat all day after AM volatility.  MBS and Treasuries both right in line with last update. 

03:44 PM Microscopic improvement in Treasuries with 10s up 3.5bps at 3.95.  MBS still down 3 ticks (.09).

Yesterday the U.S. Government took a step addressing robocalls! But in that vein, sorry for the delay in sending out today’s Commentary. I received an email earlier this morning saying that my Mont Blanc quill pen set had shipped, and for me to click on a link to track it. After clicking on the link, I was asked to provide my birthday, address, the VIN on my 1988 Corolla, and some other information. After a while, I realized that a) I never ordered a quill pen set, and that b) Montblanc is actually one word. Another phishing attempt! Steel point, fountain, and ballpoint pens all came along in the 1800s, but where were you 250 years ago? Jokes about older loan officers aside (the oldest person is currently Spain’s Maria Branyas, born in 1907), it was a quarter of a millennium ago when tensions between the American colonists and their British colonizers hit the boiling point, much of it about tea, and finally erupted into the Boston Tea Party on December 16, 1773, a political act of defiance against taxation without representation. Speaking of that era, the first real mortgage loans in America weren’t issued until the late 1700s, after the formation of the first commercial bank. On to mortgage stuff! If you’re not quite ready for that, how about a 17th of December song with a good beat heading into tomorrow? People, Debt, and Money Management Loan originators are keen students of people and their financial habits. The highlights report from the latest Logica® Future of Money Study looks at the impact of today’s economy on people’s money management and includes data from a special report on debt, how different generations are saving and investing, especially the newest generation of adults (Gen Z). It also covers who people are turning to for financial advice and what they are expecting from employers in terms of financial programs and money management.

Bonds are slightly weaker to start the holiday-shortened week (early close on Friday) and the losses happened to coincide with comments from Fed’s Goolsbee pushing back on the market’s takeaway from last week’s comments from Fed’s Williams (i.e. “we’re not really talking about rate cuts”).  Despite the correlation, there’s not a good case for causality here.  Instead, we’re likely witnessing something that we may see several more times before the week is over: random, holiday week movement driven by year-end positioning along with the lack of volume and liquidity commonly seen in the 2nd half of December.

If Fed comments were materially impacting bonds, it would tend to show up more noticeably in Fed Funds Futures.

Relying on hope, as implied in the survive until 25 slogan, is not a business strategy that will get a company through the year.