Kyle Simmons- Mortgage Loan Originator

04/09/2025

🔔 Market Update: Bonds Face Pressure Amid Global Trade Slowdown 🔔

The bond market is off to a bumpy start this week—MBS opened down nearly a full point, and the 10-year Treasury yield surged above 4.44%, up over 14 basis points. While we’ve seen some recovery from overnight lows, MBS remains down about half a point. Another big move has investors searching for answers.

What’s Driving the Shift?
Global Trade Slowdown → Weaker trade flows mean lower tariff revenue, fueling recession concerns.

Treasury Supply Pressures → A potential increase in issuance is pushing yields higher.

Foreign Demand Fades → Central banks, usually steady buyers of U.S. debt, are pulling back amid trade uncertainty.

Inflation Jitters → Ongoing tariff battles are reigniting short-term inflation fears.

Yield Curve & Fed Watch
The front end of the curve is getting a lift from hopes of Fed rate cuts, but the long end is feeling the heat of today’s sell-off. Meanwhile, the usual correlation between stocks and bonds is breaking down—another sign of shifting market dynamics.

What’s Next?
12pm ET: 10-year Note Auction

1pm ET: Fed Meeting Minutes (Could offer clues on policymakers’ thinking)

CPI (Thu) & PPI (Fri) → More potential fuel for volatility

Bottom Line
Rallies built on uncertain factors (like shifting tariff headlines) are vulnerable to quick reversals. Even if trade tensions ease, bond sentiment has shifted, making sustained gains difficult.

My take? Stay defensive until we see how markets digest this week’s key events.

04/08/2025

Sat down for an interview with Claire Boston of Yahoo Finance yesterday going over the uncertainty with mortgage rates due to the tariffs. A great read to get an insight of how we are dealing with this market.

President Trump's tariffs raised the question: Amid the market selloff, would mortgage rates come down? Apparently not. Mortgage rates are rising alongside Treasury yields.

04/07/2025

Market Volatility Alert: How Headlines Move Mortgage Rates

The bond market has been on a rollercoaster today, reacting sharply to shifting headlines on trade policy. Here’s what happened—and why it matters for mortgage rates:

Initial Sell-Off: Reports surfaced that former President Trump was considering a 90-day tariff pause (excluding China). Bonds weakened immediately, with MBS down over 3/8ths and 10-year yields spiking 13bps. Why? Lower tariffs could ease economic headwinds, reducing demand for safe-haven assets like bonds.

The Reversal: The White House later dismissed the report as “Fake News,” clarifying that the comments were speculative—not policy. Bonds recovered most losses, but volatility remains.

Key Takeaway: In today’s market, rates can swing on headlines alone. If you’re shopping for a home loan, locking at the right time matters more than ever.

Stay tuned—we’re monitoring developments closely. Have questions? Drop them below or send me a message.

03/24/2025

Week of 3/17 recap

Hope you're all doing well! Here's a quick recap of last week's key economic highlights to keep us informed and prepared for the week ahead.

Fed Holds Rates, But What’s Next?

As expected, the Federal Reserve kept rates steady at 4.25%–4.5%. They now project slower GDP growth (1.7% vs. 2.1%) and higher inflation (2.8% vs. 2.5%) for the year. Despite this, the Fed still expects two rate cuts later in 2025.

Good News for Mortgage Rates?

The Fed also announced plans to slow its balance sheet runoff in April, which helped mortgage bonds and could support lower rates ahead.

Existing Home Sales Surge in February

Against expectations, existing home sales jumped 4.2% last month! This suggests that buyers are adjusting to current rates and taking advantage of increased inventory.

Home Builder Confidence Dips, But Starts Rebound

Builder confidence dropped to a 7-month low, citing economic uncertainty and high costs. However, housing starts surged 11% after bad weather slowed construction in January. While permits dipped slightly, the demand-supply gap continues to support home values.

Retail Sales Show Cautious Consumers

Sales rose just 0.2% in February, missing forecasts and suggesting consumers are tightening spending. Since consumer demand impacts inflation, this could influence the Fed’s future decisions.

Unemployment Claims Remain High

New claims were steady at 223,000, but continued claims rose to 1.89 million, nearing a 3-year high. This signals longer job searches, which could slow wage growth and ease inflation pressures.

Key Reports to Watch This Week

Tuesday – Home appreciation & New Home Sales

Thursday – Pending Home Sales, Jobless Claims, GDP update

Friday – Fed’s favorite inflation gauge (PCE Index)

Let me know your thoughts—how are you seeing these trends impact your market?

03/24/2025

No matter what the needs of your client are, I have solutions. Message me today to find out more about this amazing program!

03/20/2025

Mid-Day Market Update and Why

Mortgage-Backed Securities (MBS) are currently down by more than an eighth of a point from today's high, which leaves room for potential negative repricing from investors. This downward movement in MBS prices is significant because it directly impacts mortgage rates, often leading to higher borrowing costs for homebuyers. Here's why this happens:

1. Inverse Relationship Between MBS Prices and Mortgage Rates:

MBS are bonds that represent pools of mortgages. Investors buy these securities to earn returns based on the interest payments from the underlying mortgages.

When demand for MBS is high, their prices rise. Conversely, when demand is low, their prices fall.

Mortgage rates move in the opposite direction of MBS prices. When MBS prices fall, mortgage rates rise, and vice versa.

2. Why MBS Prices Fall:

Interest Rate Expectations: If investors expect interest rates to rise, they may sell MBS to avoid holding lower-yielding assets. This selling pressure drives MBS prices down.

Economic Data: Strong economic data (e.g., higher inflation, job growth) can lead to expectations of tighter monetary policy (higher interest rates), which reduces demand for MBS.

Federal Reserve Policy: If the Federal Reserve signals it will raise interest rates or reduce its purchases of MBS, prices may fall as investors anticipate lower demand.

3. Impact on Mortgage Rates:

When MBS prices fall, the yield (return) on those securities increases to attract buyers. Since mortgage rates are closely tied to MBS yields, lenders raise mortgage rates to maintain their profit margins.

Higher mortgage rates make borrowing more expensive for homebuyers, which can slow down demand in the housing market.

4. Market Dynamics:

MBS are sensitive to changes in the broader bond market. If Treasury yields rise (due to higher interest rate expectations), MBS yields must also rise to remain competitive, pushing mortgage rates higher.

Investors often compare MBS to other fixed-income securities like Treasury bonds. If Treasury yields rise, MBS prices may fall to keep their yields attractive.

Summary:

When MBS prices are down, it reflects lower demand for these securities, often due to expectations of rising interest rates or economic conditions. To compensate for the lower prices, yields on MBS rise, which leads to higher mortgage rates. This inverse relationship is a key dynamic in the mortgage market.

03/20/2025

What the Fed’s Latest Announcement Means for Mortgage Rates

Yesterday’s Fed announcement gave bonds a modest lift, but in the grand scheme, it was more of a steady-as-she-goes moment. Markets responded positively to two key takeaways: a steady dot plot (rate projections) and a slower pace of balance sheet reduction (QT tapering). While this tweak doesn’t change the Fed’s long-term plan, it does mean more bond reinvestment in the short term, which helps support lower rates.

If that sounds a little technical, no worries—it’s a slight adjustment, not a major policy shift. The bottom line? It was bond-friendly, but not a game-changer.

Market Snapshot: What’s Changed Since the Last Fed Meeting?

Since late January, a lot has shifted:

Growth expectations have dropped.

Inflation data has been unpredictable.

Oil and stocks have taken a hit, while gold has surged.

The dollar has weakened, and bond demand has increased.

Mortgage rates have declined, giving borrowers some relief.

Rate cut expectations have cooled—markets now price in just 56bps of cuts this year, down from nearly 100bps two weeks ago. (See graph)

Fed’s Key Announcements:

Rates remain unchanged at 4.25%-4.50%, as expected.

Slower economic growth projected—2025 GDP forecast cut from 2.1% to 1.7%.

Inflation concerns linger—Core PCE inflation forecast raised from 2.5% to 2.8%.

Unemployment expected to tick higher—4.3% to 4.4% by year-end.
QT taper begins April 1—The Fed will slow balance sheet reduction, increasing bond reinvestment.

Also notable—the Fed removed language suggesting inflation and employment risks are “balanced,” acknowledging greater uncertainty ahead.

What Does This Mean for Rates?

Yesterday’s announcement was a slight win for bonds, but the market reaction was muted. The Fed didn’t shift rate policy, and recent inflation data wasn’t enough to force a more aggressive stance.

That said, more bond reinvestment supports lower rates in the short term. More bond buying = more demand, and higher demand helps push rates lower.

Mortgage rates remain in a consolidation phase. While we saw a small dip, this is likely a shift into a new trading range rather than a dramatic breakout.

The Bigger Picture:

The Fed nudged rates in the right direction, but the bigger picture remains fluid. Future economic data will dictate what’s next. For now, borrowers can take advantage of the recent dip in mortgage rates, but staying informed and flexible is key in this ever-changing environment.

If you have questions about how this impacts your homebuying or refinancing plans, let’s connect!

03/19/2025

Market Update: All Eyes on the Fed

Markets are on edge heading into Fed Day, with volatility running high as investors await key insights from Chair Powell. While we know rates will remain unchanged, the focus is squarely on the dot plot—a snapshot of policymakers’ rate expectations. Though its impact on market swings varies, it often sets the tone for the broader rate outlook.

No major surprises are expected today. The Fed isn’t likely to make drastic shifts, and Powell has repeatedly signaled that rate cuts aren’t imminent. However, markets are searching for a “circuit breaker”—some form of guidance to bring stability amid lingering uncertainty. Investors are weighing Fed policy, shifting trade dynamics, and government cost-cutting measures, all of which have fueled recession concerns.

Bottom line? Today’s Fed meeting could set the course for what’s ahead. With Powell at the podium, markets will hang on every word for signals on the Fed’s next move.

Quick snapshot:

10yr yields are up 2.1 bps at 4.307%

MBS are down ±15 bps

Whether you’re buying, refinancing, or just keeping an eye on the market, staying informed is key. Let’s connect if you have questions or want to discuss how these trends might impact your plans!

03/18/2025

Come by and see us at 1139 Nursery Ave. Metairie, LA!!

03/17/2025

I hope you wore green today! If not, I can help you in a pinch😜

03/17/2025

Week of March 10, 2025 in Review:

Hope you're all doing well! Here's a quick recap of last week's key economic highlights to keep us informed and prepared for the week ahead.

Inflation Takes a Step in the Right Direction

February's inflation numbers came in lower than expected! Consumer prices rose just 2.8% year-over-year, down from 3% last month. Shelter costs are still a significant factor, but as newer rental data gets factored in, we should see more improvements. Lower inflation could be good news for mortgage rates in the long run.

Wholesale Inflation Slows, But Keep an Eye on PCE

Producer inflation (PPI) also cooled more than expected, dropping to 3.2% annually. The Fed watches PCE inflation closely (coming March 28), so this will be a key indicator of what’s next for rate cuts.

Job Market: A Mixed Bag

Job openings ticked up slightly to 7.7 million, but hiring is at its lowest pace in nearly a decade (outside of the pandemic). Fewer people are quitting their jobs, which signals that workers aren’t as confident in finding new opportunities. While jobless claims are steady, continued claims remain high, meaning people are taking longer to find new work.

What’s Next?

The Fed’s big policy meeting is this week! We’ll also see key housing data, including builder confidence, construction numbers, and existing home sales. All eyes will be on how the Fed responds to the latest inflation data.

Stay informed and prepared as we navigate these economic shifts together. Let me know your thoughts or if you have any questions!