Mortgage Rate News

June 11, 2024

Orion offers some great products, and our AEs give our broker clients superior service. Financing your client’s home also involves mortgage rates and prices, and although we don’t determine the general interest rate, Orion’s management and AEs follow what moves the bond markets which determine interest rates.


The economy in the United States is heavily dependent on jobs and housing, and on Friday we learned about the employment picture for May. Non-farm payrolls, a measure of the strength of the jobs situation, rose much more than expected last month, dimming hopes for interest rate cuts by the Federal Reserve any time soon. When people work, they buy things, and often when they buy things prices go up.


Employers added 272,000 new jobs, while average hourly earnings over the past 12 month sticked higher after three straight monthly declines. Mortgage-backed securities and U.S. Treasury's sold off, meaning prices went down and rates up, and the dollar strengthened on the news, prompting traders to dial back their expectations for how much the Fed might cut rates from earlier this week when data on manufacturing and job openings came in softer than expected.


The Fed will offer its decision on rates this week after its June 11–12 policy meeting, and Orion and our AEs will be following that closely. The Federal Reserve's June decision arrives, along with its updated projections for the path of interest rates, inflation and economic growth.


The Fed statement and Chairman Jerome Powell's press conference are due on Wednesday. With the market pricing in a near certainty of no move on rates, the “dot plot”(a graphical representation of interest rate expectations) will be the main focus coming off the strong May jobs figures. The markets are now pricing in only one quarter-point cut in 2024, with the odds of a September quarter-pointcut falling to 50/50.


But wait…There’s more! Early Wednesday morning we learn the May Consumer Price Index figures. Economists forecast a 0.3 percent month-over-month increase in the core inflation rate and a drop in the annual rate to +3.5 percent from +3.6 percent. For your borrowers thinking about locking in a rate, a significantly hotter or cooler number could see some volatile repositioning, especially in bonds, ahead of the afternoon Fed news release.


Interest rates will move up and down, and there is nothing Orion or any lender can do about that. Orion can, however, focus on continuing to offer products that help your clients buy homes or refinance them, along with great personalized service.

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