The latest quarter brought forth pivotal data that reverberated through various market sectors, shedding light on potential economic policy trajectories. Notable figures, including Jerome Powell and fellow Federal Reserve members, expounded upon the state of economic policy, elucidating their proclivity for either a hawkish or dovish stance. The possibility of further rate hikes emerged as a key narrative, suggesting that inflation still lurks beyond control, compelling the Federal Reserve to persist in its rate adjustments, which could wield a profound influence over lending markets at large.
FOMC Rate Decision
Amidst the backdrop of uncertainty surrounding the effectiveness of prior tightening measures in taming inflation, Jerome Powell’s silence on the prospects of additional rate hikes left room for skepticism. Although Powell had ample opportunities to elucidate the Federal Reserve’s intentions regarding future rate adjustments, he remained taciturn, and analysts have largely converged on the view that the recent dovish leanings signify the conclusion of the rate hike cycle.
The central bank’s policy rate continues to hover within the 5.25%-5.50% range, as they assert that the economy exhibited ‘strong’ growth in the third quarter. A noteworthy observation is the absence of rate hikes in two consecutive meetings, potentially indicating a phase wherein the economy embarks on the desired path of inflation reduction, offering respite to lending parties.
Primary Mortgage Market Survey Index
In the arena of mortgage rates, the 15-year Fixed-Rate Mortgages (FRM) witnessed a marginal week-to-week increment of 00%, resulting in the current rate standing at 7.03%. On the other hand, 30-year FRM rates experienced a slight week-to-week dip of -0.03%, culminating in a prevailing rate of 7.6%.
MND Rate Index
The 30-year Fixed Housing Administration (FHA) mortgage rates encountered a week-to-week decrease of -0.61%, now resting at 7.1%. Simultaneously, the 30-year Veterans Affairs (VA) mortgage rates saw a week-to-week decline of -0.63%, with the current rates at 7.0%.
Nonfarm Payrolls
Nonfarm Payrolls, which gauge employment fluctuations, exhibited an increment of 150,000 jobs in the previous month, falling short of the anticipated rise of 170,000 and marking a substantial decline from the 297,000 jobs added in September.
Job Claims
The weekly labor market report divulged an unsettling development as unemployment claims reached a six-month high. Initial claims surged to 217,000, surpassing the expected 214,000 claims and exceeding the prior week’s count of 211,000.
ISM Manufacturing Data
This week, the release of the ISM Manufacturing Data reverberated across various sectors, encompassing manufacturing, home construction, and commercial building. The Institute for Supply Management’s manufacturing survey witnessed an uptick to 49.0% last month from 47.8% in August, marking the third consecutive increase and reaching a 10-month peak.
The production index surged by 2.5 points to 52.5%, signifying positive momentum for the second consecutive month. In contrast, the prices index, which gauges inflation, descended by 4.6 points to a relatively modest 43.8%, although it remains susceptible to future oil price fluctuations. The index of new orders ascended by 2.4 points to 49.2%, with the auto industry strike having had minimal impact so far.
What Lies Ahead
Following the FOMC rate decision meetings and the manufacturing data release, the upcoming week is slated to be relatively subdued, with notable economic reports limited to Consumer Credit and Wholesale Inventories.
