The new regulations could increase the influx of non-agency mortgages the REIT has seen since the banking crisis spurred some depositories to shed residential assets.

Figure Technologies laid off 90 employees this week, or about 20% of its staff, while it’s also interviewing bankers in advance of a planned initial public offering for its lending business next year, according to documents reviewed by Bloomberg.

Consumer advocates are protesting specific risk-weighting changes affecting borrowers with lower down payments. Also, broader increase in requirements may discourage depository holdings of servicing.

Citing issues that arose during this spring’s bank failures, the central bank and other agencies urge depositories to ensure they are ready to borrow at a moment’s notice.

The owner of Tri-Emerald Financial Group claimed unregistered securities it was offering would increase in value by more than tenfold before an eventual Nasdaq listing.

Core PCE is often referred to as the Fed’s preferred measure of inflation.  The Employment Cost Index (ECI) has been one of the only few economic reports mentioned explicitly by Powell during press conferences in the past year.  Both reports came out this morning, but both were very close to consensus.  Bonds didn’t do much with the data and are thus left to find their own way to comment on yesterday’s attack on the 4.0% 10yr ceiling.  On that note, an intermediate technical level is already emerging at 3.95.  It had offered support on the way up yesterday and has acted as resistance so far today.

What to Make of This Week’s Movement

Friday ended up being a slightly stronger session for bonds, but not in any impressive way.  Moreover, it wasn’t remotely strong enough to undo the damage seen yesterday.  The overall takeaway is that it is strong economic data more than anything that is keeping the upward pressure on rates right now.  Things may have looked completely different had we not seen lower jobless claims and higher GDP on Thursday.  The other takeaway is that it’s not just inflation data that matters.  In fact, it’s telling that Friday’s PCE and ECI data (both inflation-focused) argued for a rally, but bonds mostly lost ground after the data came out.

Econ Data / Events

Core PCE Prices

0.2 vs 0.2 m/m
4.1 vs 4.2 y/y

Employment Cost Index (ECI)

1.0 vs 1.1 f’cast, 1.2 prev

Consumer Sentiment

71.6 vs 72.6 f’cast

Market Movement Recap

09:05 AM No reaction to econ data.  stronger overnight, but slipping now.  10yr down only 1.5bps at 3.987.  MBS up 6 ticks (.19).

12:18 PM recovering back toward AM highs with MBS up just over a quarter point.  10yr yield down 3.3bps at 3.969.

04:31 PM Drifting to best levels in late trading.  10yr down 2.7bps at 4.013.  MBS up 3/8ths. 

Mortgages are only part of our lives, right? I only know what I read online, although Abraham Lincoln once said, “Don’t believe everything you read on the internet.” Before you fly down the freeway on a summer vacation, I also know that I have received my fair share of speeding tickets. (For those of you who haven’t, it’s a “punch in the gut” feeling to see that red light in the rear-view mirror. I’ve been able to talk them out of… none.) In something that smacks of Big Brother watching all the data, apparently 9 percent of drivers had a speeding ticket in 2022. Those drivers probably knew the speed limits, but in case you’d like a map of worldwide speed limits, here you go. (Thank you to Carol K.!) The official FHFA 2024 loan limits won’t be out until around Thanksgiving, of course, but in terms of inventions there is no limit on innovation. Face it: there isn’t a lot of innovation in lending. Sure there are tweaks when it comes to programs and pricing, but in the builder world, printed homes continue to progress. Do you have a program for them, or are they no big deal? (Today’s podcast can be found here and sponsored by ReadyPrice, offering the industry’s most powerful universal delivery portal that gives brokers the edge they need. Shop, lock and deliver with multiple lenders, all in one place, for free! Hear an interview with Polunsky Beitel Green’s Marty Green on the latest Fed rate hike and what it means for mortgage rates and affordability going forward.)

The association thinks this could simplify and manage the costs of two new pending credit requirements by allowing companies to add the one that’s been through a price hike second.

While the monthly amount decreased by only a few dollars in June, it was the first decline since late last year, according to the Mortgage Bankers Association.