Indexes Affecting Rate Lock

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Treasury Auctions (5,7,10,20,30 year)

This week's scheduled activities will begin tomorrow afternoon when results of the first of two Treasury auctions will be announced at 1:00 PM ET. 5-year Notes will be sold tomorrow followed by 7-year Notes on Tuesday. If these sales are met with a strong demand from investors, bond prices may rise during afternoon trading. This could lead to improvements in mortgage rates during early afternoon trading. A lackluster investor interest may create selling in the broader bond market and lead to slight upward revisions to mortgage rates.

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Tariff News

Tariff and trade-related headlines from this weekend are expected to fuel stocks gains tomorrow morning. Comments from Treasury Secretary Bessent indicates that framework for a trade deal with China has been reached, averting a significant spike to existing tariffs. President Trump is expected to meet with his Chinese counterpart later this week to finalize the trade agreement, but we can expect the markets to react tomorrow. Bonds have been all over the pace when responding to previous tariff headlines, making it difficult to predict if this weekend’s news is going to be favorable news for rates or fuel bond selling that will push rates higher. We will see tomorrow morning.

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Consumer Confidence Index

This week’s sole relevant economic report (due to government shutdown) will come late Tuesday morning when October's Consumer Confidence Index (CCI) is posted. This report comes from the Conference Board, who is a New York-based business research group and not a governmental agency. The index helps us gauge consumer willingness to spend by tracking consumer confidence in their own financial and employment situations. It is expected to show a minor decline from last month's 94.2 reading. That would mean surveyed consumers felt slightly worse about their own financial and employment situations than they did last month. Good news for the bond market would be a noticeable decline because waning confidence usually translates to weaker consumer spending levels, which makes up over two-thirds of our economy. Current forecasts show a reading of 94.0. The lower the reading, the better the news for mortgage rates.

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Federal Open Market Committee (FOMC) Statement

The big news of the week will be Wednesday afternoon’s FOMC meeting adjournment. Fed Chairman Powell and friends are expected to make their second consecutive rate cut, lowering key short-term rates by .250 of a percent despite a noticeable lack of important economic data to use as guidance. Last Friday’s release of September’s Consumer Price Index (CPI) will contribute to their decision, even though the report didn’t show enough of a surprise to alter the Fed’s plans. That report was released despite the shutdown because it is used to determine the annual Cost of Living Adjustment to social security benefits. A secondary benefit was giving the Fed some data to rely on this week.

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Misc Fed

The meeting begins Tuesday and will adjourn Wednesday at 2:00 PM ET. Their written statement will also be released at that time, while the press conference with Chairman Powell will start at 2:30 PM ET. This meeting does not include revised economic projections or their dot plot of key rate predictions. We should see a good amount of volatility Wednesday afternoon. Assuming we do get a quarter point rate cut, traders will be most interested in what the Fed expects to do at December's meeting and how the government shutdown may influence their plans.

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Fed Talk

Another note about the FOMC meeting is that once it adjourns, the Fed’s mandatory quiet period does so also. That means we can hear individual Fed-members give their opinions about inflation, tariffs, the economy and other topics that affect monetary policy. These speeches start late Thursday morning when Vice Chair of Supervision Michelle Bowman speaks via a pre-recorded video. Her event will be followed by a couple of other member speeches Friday and many more will likely be added soon. Any surprise comments about important topics can have an impact on the financial and mortgage markets, especially since the shutdown is removing the opportunity for the markets to react to many of the regularly scheduled economic releases.

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Corporate Earnings

We are also in the middle of corporate earnings season where publicly-traded companies report their quarterly and annual results and/or projections. This week has some very big names scheduled, such as Chevron, Microsoft, Alphabet, Exxon Mobile, Meta, Apple, and Amazon. These announcements will affect stock trading much more than bonds, but a strong rally in stocks could lead to pressure in bonds that pushes mortgage pricing higher. If these earnings disappoint stock analysts, weakness in stocks may cause a flight to safety of bonds that leads to mortgage rates moving lower.

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Overall, the government shutdown is making this another light week in terms of the number of economic releases and other scheduled events, but the FOMC meeting carries such a high level of importance that it is quite possible we will see a big move in the markets and mortgage rates anyhow. The most important day for rates is clearly Wednesday due to the FOMC events, but don’t be surprised to see some movement tomorrow also as the markets react to this weekend’s headlines. The calmest day for rates could be any other day than tomorrow and Wednesday. If you are floating an interest rate and closing in the near future, it would be prudent to keep an eye on the markets because they may be quite active at times this week.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

Treasury Auctions (5,7,10,20,30 year)

Tariff News

Consumer Confidence Index

Federal Open Market Committee (FOMC) Statement

Misc Fed

Fed Talk

Corporate Earnings

none

Float / Lock Recommendation