{"id":616593,"date":"2023-03-10T15:14:00","date_gmt":"2023-03-10T21:14:00","guid":{"rendered":"https:\/\/news.sellorbuyhomefast.com\/index.php\/2023\/03\/10\/why-mortgage-rates-fell-with-a-stronger-jobs-report\/"},"modified":"2023-03-10T15:14:00","modified_gmt":"2023-03-10T21:14:00","slug":"why-mortgage-rates-fell-with-a-stronger-jobs-report","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2023\/03\/10\/why-mortgage-rates-fell-with-a-stronger-jobs-report\/","title":{"rendered":"Why mortgage rates fell with a stronger jobs report"},"content":{"rendered":"
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What a week this has been for the housing market<\/a>, from the fireworks of Fed Chair Jay Powell\u2019s Congressional testimony to an attempt to break over a critical line on the 10-year yield. Then Friday we got solid jobs and labor force growth data and the surprising failure of Silicon Valley Bank<\/strong>. Let\u2019s look at each of these, one at a time. <\/p>\n

Fed Chair talk<\/strong><\/h2>\n

First, Federal Reserve<\/a><\/strong> Chairman Jerome Powell<\/a> did not have his best week as he looked unsure of himself, like most Fed members have recently, about what is happening here with the economy and the path of future rate hikes. <\/p>\n

I could spend three days on this topic; however, for the sake of focusing on the jobs report today, I would listen to this podcast<\/a> and read this article<\/a> to understand my frustration now with the Fed messages. My entire stance on the Fed not pivoting was based on their logic about why they hiked rates so fast.<\/p>\n

10-year yield <\/strong><\/h2>\n

Those following the weekly Housing Market Tracker<\/a> article already know I have discussed critical technical levels on the 10-year yield on the bottom-end range and where we were this week. It\u2019s going to take something big to break above this level and get to my 10-year yield peak call forecast<\/a> at 4.25%.
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A snapshot of today\u2019s 10\u2019s year yield at this second:<\/p>\n

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I feel terrible for some of my friends who were livid this week that the 10-year yield didn\u2019t blow up higher with the Fed funds rate being priced higher for longer. However, as I have stressed recently, this isn\u2019t the 1970s baby<\/a>, and the long end of the bond market is having a \u201cmarried at first sight\u201d<\/a> spat with the short end of the bond market for some time now. <\/p>\n

Bank run?<\/strong><\/h2>\n

The news<\/a> that Silicon Valley Bank<\/strong> failed has to have shocked Mary Daly, president and CEO of the San Francisco Federal Reserve Bank of San Francisco since this happened in her district. I expect some emergency Fed meetings over the weekend to see if other banks are at risk. Read the statement by the FDIC<\/strong> about taking over the bank here<\/a>. <\/p>\n

From BLS<\/a><\/strong>:Total nonfarm payroll employment rose by 311,000 in February, and the unemployment rate edged up to 3.6 percent, the U.S. Bureau of Labor Statistics reported today. Notable job gains occurred in leisure and hospitality, retail trade, government, and health care. Employment declined in information and in transportation and warehousing.<\/em><\/p>\n

How can the unemployment rate increase and we still have big job numbers printed? Well, if the labor force grows, this happens from time to time and this is the Federal Reserve\u2019s dream to have the labor force growth rise faster.
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The Federal Reserve wants wage growth to cool down more and more and believes a higher labor force growth will help them.\u00a0<\/p>\n

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What the Fed wants is for the wage growth data on a year-over-year basis to head much lower and stay there. According to the Fed, Americans are getting too much wage growth, and labor has power over their bosses \u2014 this will not be tolerated in America.\u00a0<\/p>\n

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The labor force participation climbed noticeably from prime-age people and is now close to the pre-pandemic highs.<\/p>\n

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The total civilian labor force level is over 166<\/strong> million<\/strong>, so we have people who can fill the jobs and get us to the job-growth level we should have had before COVID-19.<\/p>\n

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For those who did not follow me during the COVID-19<\/a> recovery, I had a few critical talking points about the labor market:<\/p>\n