Rates & Updates January 29, 2025

Rates & Updates January 29, 2025

Good afternoon, Here is your weekly update. Enjoy!

Rates fell by an average of .256% APR across our tracked programs, in part, on a flight to the safety of US Treasuries and Mortgage-Backed Securities (MBS) following questionable tech stock valuations. Chinese company DeepSeek had disrupted the Artificial

Intelligence (Al) market on claims it can create viable Al at a fraction of the cost that the current tech giants are able to.

The Fed's first meeting of 2025 wrapped up today with Fed Chair Powell's speech and leaving the Fed Funds Rate unchanged. Powell believes the labor markets, economy, and inflation are well positioned, allowing the Fed to act and react as new data presents itself.

The Fed does not have a rigid path forward and future moves will be data dependent, including the potential impact of tariffs and other changes in trade policies. When asked about President Trump's recent comments that he would demand lower rates immediately,

Powell stated he has not had this conversation with President Trump at this time. Interestingly, Powell did acknowledge that housing could be impacted by higher mortgage rates, but didn't offer any Fed guidance to relieve the situation.

Weekly initial jobless claims were nearly inline with 223,000 new claims versus 220,000 expected. However, continuing claims took a meaningful move higher to nearly 1.9 million from 1.85 million a week prior, the highest we've seen since late 2021. It is also unclear

how any government job cuts will impact the greater economy.

The US Bureau of Economic Analysis (BEA) will release its latest US Gross Domestic Product (GDP) on Thursday and its Personal Consumption Expenditures (PCE) on Friday and has the potential to move mortgage rates. There is currently less than a 30% chance of a

rate cut during the Fed's next meeting in March. Mortgage rates are volatile but may have crested over the last two weeks. As always, if you have any specific questions or scenarios you would like to discuss our team is happy to help.