Strong Jobs Report Bumps Rates Higher – For Now

Despite strong economic releases, unexpectedly weak home construction data and concerns about international trade relations tempered mortgage rate increases over the past seven days.

Demand for Treasurys eased as the Core Consumer Price Index – a key measure of inflation which posted its stronger increase in 18 months – and retail sales figures beat what the market anticipated. Generally, strong economic reports decrease the likelihood that the Fed will cut rates, which makes bonds less attractive, pushing yields, and generally mortgage rates, upward.

These upward movements tapered in recent days, however, as weak home construction data, along with decreasing sentiment surrounding U.S.-China trade relations boosted demands for Treasurys and pushed mortgage rates back downward. Generally, rates have held strong through a stretch that could have resulted in upward movements, but with more housing data on tap for next week, rates aren’t off the hook yet.