It hit me this morning… The current interest rate market is essentially EVERY season of the Dallas Cowboys. Think about it. Each year, we beaten down Cowboys fans get all excited about what the season might bring. Trades go off, positive signals emerge, and hope is offered that this will be the year everything turns around! And then, right when the season is on the line… we faceplant.
If you happened to catch last night’s Cowboys game, then you know exactly what I (we) am feeling. In mortgage land, the recent loss of momentum has felt eerily similar.
After watching the 10-year march downfield to sub 4.0 percent levels, only to turn the ball over and trade back north, we’ve unfortunately left our defensive unit on the field. What we need now is a stop.
Today, it appears we may have held the line, thanks to concerns over stock price valuations in the equities market. While it’s too early to tell if a trend is forming, the flight to quality we’re witnessing is helping to stop the bleeding.
Quick note: tomorrow we’ll receive the ADP private payrolls report, which may offer some tea leaves on the employment sector. The number is expected to be positive, around 40 thousand jobs added, compared to last month’s negative print. Still, even if the result hits the mark, it doesn’t exactly scream “resilient labor market.”
With all said, if we’d consider our team down but not out, what we are left with is a Dak to Ceedee deep ball in hopes of a conversion. Whether that comes in the form of further softening in the employment market or perhaps compounding stock market loses, what we do know today is that we can’t be surprised when the challenge flag gets thrown and we wonder why we’ve come up short of the 1st down marker… After all, Mortgage Football is a game of inches and if we’ve learned anything over the past few possessions, the most important play is always the next play.
Until next time, keep your chinstraps tight and your pipelines tighter… we are about to hit the 2-minute warning on 2025!