Friday Market Update for the Week of March 19th 2021

Happy Friday! Brian Manning here with the weekly update. Crazy week, wow. So let’s see… Monday and Tuesday of this week were really relatively quiet news days. Everyone was waiting for the Federal Reserve meeting.

The Federal Reserve started their 2-day meeting on Tuesday of this week and on Wednesday of this week. We had Jerome Powell, as he does and as the president of the Federal Reserve always does, after their wrapping up of their 2-day meeting and I would say, US markets were fairly muted after Jerome Powell’s speech. He always delivers a speech and there’s a Q&A from the press. And you know, it wasn’t really what Jerome Powell said, it’s just probably more of what he didn’t say and just really not clearly addressing inflation or kind of just being more vague about letting inflation run hot. So US markets were fairly muted.

Then, Asian markets opened because they are on a different schedule and they do because of the time difference, and Asia was like: “Oh hell no, you guys are messing this up. Jerome Powell, no way we see inflation coming”. Asian markets went crazy, not in a great way and then when US markets opened up on Thursday they had watched what Asia did and US markets went haywire on Thursday as a result of this, so you know, the reality is, we’re going to see inflation run hot. When we start looking at what’s going to happen for inflationary reports in May and June of this year, so coming up fairly into the future it’s going to give us inflationary information which is definitely going to see an increase. The reason why is because every time you get an inflationary report it’s looking at the most recent 12 months and the prior months so from a year ago, that’s the one that’s dropping off. So when we went into this pandemic and you look at April and May of 2020 April and May were either almost at 0 or they were negative because the country was shut down and now you’re going to come into April and May of 2021, where the country is kind of re-opening and when you replace a negative number with a positive number that immediately has a very drastic impact on the inflationary reading, so in May and June of this year, we’re definitely going to see some inflationary readings heat up in stuff like Inevit, Impath and interest rates.

Right now, I’ll tell you, we’re definitely in a locking bias, just because we’re slowly increasing rate trend. I wouldn’t be freaking out. Interest rates are phenomenal, we’re still locking people people at amazing interest rates but we’re just in a trend but I’ve seen rates slightly rise. I just want to show you on the charts really quickly kind of what we’ve seen this week, so you know, lately we’ve been looking at the 10-year treasury and this is the yield on the 10-year treasury because mortgage rates generally move in the trajectory of what the yield on this 10-year treasury is doing, right? So we talked about this one and you know, we started looking at it back here and we said, “Hey, if the 10-year treasury breaks above this ceiling of resistance you know, we’re going to start seeing an upswing”, so sure enough – we did. And then we come here and we look at this week and we started to break above it at the end of last week.

This is today’s reading right here and you know, we’ve convincingly have broken above this 1.6 and we’re definitely just seeing some increases there. If we look at the yield on the 10-year treasury, let’s just say for the last 2 years you know, we’re kind of back in the territory of where we were in pre-pandemic. And I would tell you this, we were locking people pre-pandemic, we were so excited to be locking people in the lower threes, people were buying houses, people were refinancing, it was just phenomenal, so we’re kind of back in that area, I’m still super positive on it, I think that interest rates are amazing. I’ve been doing this 23 years and they’re just phenomenal.

If you have any questions, you want to talk more about this. There’s a lot more information I can give you on what’s going on in the markets. I would love to help you in any way I can. I’m also around all weekend. Reach out to me, call me on my cell phone, text me, I’m more than happy to help you with your pre-approvals. I’d love to be part of your business.

Happy Friday, have a great day.