Financial Reports

The previous week had the Federal Reserve making their first rate decision since the Trump administration had taken office. With many uncertainties about the current direction of things, the Federal Reserve had decided there would not be any change necessary to the current rates. Stating that the current inflation and economic conditions have largely been a result of the Trump administration’s policies on tariffs. Chairman Powell has been strongly dovish at this point, stating they would need to “see how things actually work out.” There were a slew of other minor data releases but none were far reaching in their impact on the economy and current direction of things.

FOMC Rate Decision

Faced with pressing concerns over the impact tariffs will have on a slowing economy, the rate-setting Federal Open Market Committee kept its key borrowing rate targeted in a range between 4.25%-4.5%, where it has been since December. Markets had been pricing in virtually zero chance of a move at this week’s two-day policy meeting.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates saw an increase of 0.03% with the current rate at 5.83%
• 30-Yr FRM rates saw an increase of 0.02% with the current rate at 6.67%

MND Rate Index

• 30-Yr FHA rates saw a decrease of -0.13% for this week. Current rates at 6.15%
• 30-Yr VA rates saw a decrease of -0.13% for this week. Current rates at 6.17%

Jobless Claims

Initial Claims were reported to be 223,000 compared to the expected claims of 225,000. The prior week landed at 221,000.

What’s Ahead

Next week should feature a slew of data releases, most notably the GDP Estimates, S&P Global US Manufacturing / Services PMI estimates, Consumer Confidence, Consumer Sentiment (Univ. of Michigan), and Personal Income & Spending.

The inflation data report released last week showed a surprising result—it was cooler than expected across the board. This has led to a much more positive outlook, even in light of recent events regarding the Trump administration. While consumer sentiment reports from the University of Michigan still showed more dissatisfaction than expected, they were accompanied by largely positive data across various releases. There are strong expectations that there will be no interest rate increases, with some potential for rate cuts this year.

Consumer Price Index

The consumer price index increased a mild 0.2% last month, the government said, breaking a string of elevated inflation readings since November. The rate of inflation in the past 12 months fell to 2.8% from 3.0% in January. It had slowed to as low as 2.4% early last fall before a rebound in inflation toward the end of 2024.

Producer Price Index

The flat reading in the producer-price index — helped by lower energy costs — came in under expectations. Economists polled by the Wall Street Journal had forecast a 0.3% increase. The last time the producer-price index showed so little inflation was in July. The rate of wholesale inflation in the past 12 months, meanwhile, dropped to 3.2% from a one-year high of 3.7% in January.

Consumer Sentiment

The burst of optimism following Donald Trump’s presidential election victory has evaporated. A new survey shows that Americans are worried about rising inflation due to the president’s tariffs and are unsettled by the uncertainty in Washington. According to the University of Michigan, consumer sentiment fell to a 29-month low of 57.6 in March, down from 64.7 in the previous month.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates saw an increase of 0.01% with the current rate at 5.80%
• 30-Yr FRM rates saw an increase of 0.02% with the current rate at 6.65%

MND Rate Index

• 30-Yr FHA rates saw an increase of 0.11% for this week. Current rates at 6.28%
• 30-Yr VA rates saw an increase of 0.10% for this week. Current rates at 6.30%

Jobless Claims

Initial Claims were reported to be 220,000 compared to the expected claims of 225,000. The prior week landed at 220,000.

What’s Ahead

The FOMC is making it’s next rate decision in the upcoming week on Wednesday. There are a number of smaller data releases surrounding the rate decision, but largely all eyes are on the rate decision.

While the data releases were plentiful, many are made less significant in consideration of the current disruption with the administration and the oncoming inflation data reports with the CPI and PPI arriving next week. The largest and most noteworthy report this time is the Job Report numbers, which will help give a clearer idea on the state of the job market. With the mass federal layoffs, there is much uncertainty, but the labor market is still holding up in light of things. The most pressing data to be released is the predictions for GDP, which has shown to have shown a deflationary value. As long as the inflation data remains consistent then there is little chance the Federal Reserve will consider increasing the interest rates once again. The silver lining in all the reports is the Manufacturing PMI data is noting that the manufacturing sector is still showing strong growth.

Job Reports

The U.S. added a decent 151,000 new jobs in February, but the labor market could soften up in the months ahead as the effects of tariffs, federal spending cuts and mass layoffs of government workers percolate through the economy.

Manufacturing PMI

The seasonally adjusted S&P Global US Manufacturing Purchasing Managers’ Index recorded 52.7 in February, up from 51.2 in January. It was the second successive month that the index has pointed to an improvement in the health of the manufacturing sector, with the rate of growth the best since June 2022. Growth was underpinned by noticeable upturns in both production and new orders. There was some evidence that sector expansion was partially driven by advanced purchases ahead of likely price increases and possible supply disruption related to further tariff impositions in the coming months.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates saw a decrease of -0.15% with the current rate at 5.79%
• 30-Yr FRM rates saw a decrease of -0.13% with the current rate at 6.63%

MND Rate Index

• 30-Yr FHA rates saw an increase of 0.05% for this week. Current rates at 6.17%
• 30-Yr VA rates saw an increase of 0.05% for this week. Current rates at 6.20%

Jobless Claims

Initial Claims were reported to be 221,000 compared to the expected claims of 235,000. The prior week landed at 242,000.

What’s Ahead

The major inflationary reports ahead this week with both Consumer Price Index and Producer Price Index are expected to come in line with the previous quarters.