Good news is typically bad news for bonds and home loan rates. That has not been the trend of late, and certainly not this past week.

Durable Goods Orders is a report which shows buying demand for products with a life cycle beyond 4 years — think cars, washing machines and planes. And that buying demand of long-lasting goods is up at the highest levels since last summer, highlighting that the US economy continues to grow, and consumers and businesses feel confident in investing.

Adding to the good-news week were continued strong corporate earnings reports, and future guidance from the likes of Amazon, Microsoft and Facebook.

Finally, the first look at 1st quarter GDP showed the US economy grew at a blistering 3.2% pace — way above economists’ expectations of 1.9%. The US economy is reaccelerating.

In the face of all the good news, home loan rates held steady and remain near one-year lows.

Bottom line: when you consider the strong labor market, rising wages, growing economy, low inflation, high consumer confidence, and low rates – it truly is a Goldilocks situation in the economy and for anyone looking to buy a home.

Looking forward: the financial markets are gearing up for some volatility. This is a big news week with key readings on inflation and jobs – but most of all, it’s Fed week.

The two-day Fed meeting will kick off on Tuesday and ends Wednesday with the 2:00 p.m. ET release of the monetary policy statement. There is a near zero-percent chance of a hike to the benchmark Fed Funds Rate, currently at 2.50%.

The Fed has been quite dovish and market-friendly since the year started — will it continue? We shall find out the Fed’s take on the present state of the US economy and the future of interest rate hikes when the statement is delivered, and when Fed Chair Powell conducts a press conference at 2:30 p.m. ET following the monetary policy release. There are times when Fed Chairs say off-script remarks that can create high market volatility in stocks and rates so stay tuned.

The April Jobs Report will be released along with ADP Private Payrolls. In addition, the Fed’s favorite inflation gauge, the Core PCE, will also be reported. The Core PCE fell to 1.8% year-over-year in the last report, below the 2% target range set by the Fed. Inflation, should it remain low, will continue to keep mortgage rates at relatively low levels.

Bottom line: If there was a week where we can shift from complacency to volatility — this is it.

Reports to watch:

  • The heavy economic calendar begins on Monday with the Core PCE, Personal Income and Spending.
  • The S&P Case-Shiller 20-City Index, Pending Home Sales, Consumer Confidence and the Employment Cost Index will be delivered on Tuesday.
  • Manufacturing will be seen from the Chicago PMI on Tuesday with the national ISM Manufacturing Index on Wednesday and ISM Services on Friday.

Related Articles

U.S. bond yields and home loan rates ticked modestly higher this week as the world watches the U.S. and China have their first serious talk since July. There is a growing sentiment that the U.S. and China will agree to some short-term measures like a postponement of tariffs, while the…
Read More of the post Fed Rate Cut Coming — But Don’t Wait

Recession fears were back in full swing this past week, thanks to the weakest manufacturing report since June 2009, which was the last month of the Great Recession. Manufacturing makes up 12% of our economy, while consumer spending makes up nearly 70%. So even though the consumer remains strong, markets…
Read More of the post Slowing but Growing

The economic data coming out of the US this week showed that not only is a recession highly unlikely anytime soon, but the economy is actually reaccelerating from the slowdown seen last Fall. Back in October and November, the Fed was very hawkish and suggested that three rate hikes would…
Read More of the post Fed Sparks Economic Reacceleration

Initial Jobless Claims is a weekly report that tracks how many people have filed for unemployment benefits. It is both a solid gauge on the state of the labor market and economy, and a leading indicator on what to expect in the months ahead. So, what are Initial Jobless Claims…
Read More of the post Let the Good Times Roll