March 5, 2024 – Rate Commentary

• March 5, 2024
• realestatelife
• Business & Markets, Fed, Interest Rates, Politics & Economy, Rates, Real Estate, Real Estate Finance, Recession, World News, Your Real Estate Life

Rate sheets this morning should be slightly better on the day, if early gains for bonds hold up. Reprice risk on the day is low, there is some economic data coming out at 10am ET that could affect the first rate sheets issued on the day, but it’s crickets after that. However tomorrow will start the fireworks, with a couple of labor reports (ADP private payrolls and JOLTS – job openings and labor turnover survey) along with day 1-of-2 days of Fed Chair Jerome Powell’s testimony in front of Congress. If we see some signs that the labor market is weaker than we’ve been led to believe up till now, it could help rates fall a little bit on the day. Thursday and Friday also have a lot of action though, especially Friday’s Bureau of Labor Statistics (BLS) jobs data.

For loans closing in less than 15 days, cautiously float. If any loans in this window are nervous, consider locking them today. However, floating could pay off here, especially if there are big revisions lower to last month’s BLS jobs report when this month’s report comes out on Friday.

For loans closing in 15-30 days, cautiously float. These loans want to watch this week’s jobs data and then next week’s CPI inflation data on the 12th… we could see rates move lower if we get some help from lower inflation and a weaker labor market.

For loans closing in 30+ days, float. Loans that don’t close until April or after could see help from the March 8th labor report as well as the next CPI inflation report on the 12th and the March 20th Fed meeting/press conference. Although there is always some risk, we have a good shot at improving.

Technicals:

The UMBS 5.5 coupon is at 99.16, +16bps on the day.

The 10yr Treasury yield is at 4.16, continuing to fall back from the highs of last week. We should see the 10yr hold steady or fall further if we get favorable data the next few days, but if the data shows labor market strength it is likely to move higher again.