PRESIDENTIAL RESULTS, THE FED, MARKETS, + WHAT'S NEXT

Rates are RELATIVELY FLAT?as we end the week!? Check em' out and then read our 30 second commentary below.?Rates are averages / examples for network use only: Pricing as of 11/8/2024 at 1:06 PM.

PRESIDENTIAL ELECTION, RATES, THE MARKET, AND THE FED

Following the election of Donald Trump as President, financial markets have been volatile. Both the Dow Jones and S&P 500 experienced an initial surge, as did the 10-year Treasury yield—a key indicator influencing mortgage rates.

As of Friday morning, the 10-year Treasury yield has began to decline, shedding 3 basis points to close at 4.31%, down from last Friday's level of 4.37%. This follows an 11-basis-point drop from the previous session. Ian Lyngen, BMO’s head of U.S. rates, noted that “the Treasury market continues to stabilize as the ‘Trump trade’ momentum recedes," as yields settled back into the 4.20-4.30% range seen at the week's start.

In another key event, the Federal Reserve cut interest rates by a quarter-point to a range of 4.50%-4.75% on Thursday. Fed Chair Jerome Powell emphasized a data-driven approach going forward, stating that policy decisions would be made on a “meeting-by-meeting basis” with no predetermined direction. He expressed confidence in the economy’s resilience.

The Fed’s final meeting for the year, scheduled for December 17-18, currently has a 75% chance of another rate cut, according to CME Group’s FedWatch tool.

In housing, mortgage applications fell 10.8% last week per the Mortgage Bankers Association’s index. This marks the sixth consecutive weekly decline, with purchase applications reaching their lowest level since mid-August and refinancing activity hitting its lowest since May. “Applications decreased for the sixth consecutive week,” noted Joel Kan, MBA economist, “with purchase activity falling to its lowest level since mid-August and refinance activity declining to the lowest level since May.”

Looking forward, investors are anticipating the October inflation report next week, alongside new consumer sentiment data. These reports will offer additional insight into economic conditions as we approach the Fed’s final meeting of 2024.

Stay tuned next week for updates on Fed decisions and potential shifts in mortgage rates.

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