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This is hunter Boyd on

mortgage mindset.

We are here today with sherry,

Riano. What's up, sherry? Hey,

how's it going today?

Going good. It's going good.

Great week for us.

It's been wild.

We had our first fed up

date of the year,

and some surprising things.

Not so much today.

We're going to talk about what

we heard this week also talk

about what we think is going to

happen over the next 30 and 60

days. let's kick it off, though.

No change, no surprise.

So no drop in bond.

And I don't think anymore was

expecting that we had a 97%

plus chance of no change.

And I think investors got that

right. Obviously not till march.

That's exactly right.

That's exactly right.

Investors are still pricing in a

march change and at least

a 25 basis point drop.

But Jerome Powell actually came

out this week and said he

doesn't think March is likely.

Now,

whether that is because he's

trying to save face or he's

trying to look at a little bit

more inflationary data,

we'll see that over the next

month or so. Sherry,

what do you think?

why are we seeing the kind of

cat and mouse game for March?

I feel like a lot of investors

are still pricing it in,

but Jerome's really not

giving us much. Well,

welcome to our world. Yeah,

it's constantly that way.

And this time of year,

especially when we've got that

potential to have a drop,

but not have a drop.

Look,

they don't want to overcommit,

but Jerome Powell a couple

of months ago said, hey,

we're going to keep raising

rates. And it wasn't,

I don't even think,

two weeks later,

and we're dropping rates.

So I'm not sure Jerome knows

what Jerome's doing,

but I could be wrong because

I don't have his job.

But I think they like to keep

the markets. I think, you know,

in that.

That's why we feel this

turbulent up and down

with the know,

it looks like rates are

starting to go down.

We get a little comfort there,

and then they like to come talk,

and then it stirs the

whole market up,

and that affects all of us.

I do think there's data

he's looking for.

and I'll let you talk a little

bit more about what he believes

good data is.

And then I want to chime into

what I believe good data is.

Yeah,

so we're still seeing

inflation too high.

It's right now sitting at 3.4%.

The fed has continued to say

they want to see it at 2%.

And how to get there they

touched on a little bit this

week is they said they

were looking for,

quote unquote good data a

continuation of good data.

And what does that mean?

So I think what we're looking

for is prices to drop.

We're looking for the grocery

bill to be eased a little bit.

maybe some rent costs

starting to go down,

which we have seen over the last

six months that started to drop,

but I think they want that

a little bit longer.

they really have harped on this

2% inflation or number

for a while,

and some people don't think it's

a realistic expectation or a

realistic accomplishment,

but the fed seem to think so,

and they seem to think they can

do it without a recession.

so continuing to look

for good data,

whether it's an ease of the gas

pump, groceries, rent, whatever,

how long do you think they need

to see that for before they will

actually consider dropping?

I'm thinking they're going to

look for a good strong six

months of that happening.

gas prices have been going

down for a while.

We've noticed it at the tank.

But the reality is,

I don't know about you,

but I currently have a

family of two now,

because as you all will know,

Richard and are empty

nesters now.

And when we can spend $200

at the grocery store,

and I'm not talking about

getting the fillet

mignon people,

I'm talking about getting

chicken breast. Yeah.

And I'm rolling out of there

with $200 of just basic food

items. I look around and go,

how does a family of four

make this work for them?

You really got to have

either mom or Daddy,

whoever happens to be at home

raising the children.

Or if you're both working,

that's fine too.

But somebody's got that pencil

sharpened. Yeah.

Because otherwise you're not

getting to go do anything.

And that's hard on a,

know the fed let this inflation

rate go way too. Yeah.

A lot of the economists were

pushing the button way before

they had ever done

and it's amazing to me that,

that all of a sudden became

their concern when they let

inflation get up to 6%.

Right.

And I do think that's why

they've kind of left good data

slightly ambiguous as well.

Because they didn't give us an

indication on what they

were watching before,

and they don't want to give us

an indication of what they're

watching for now,

because if they give us, hey,

look,

we need to see

gas prices, pre Covid,

or we need to see the cost of

the grocery store dropped back

to pre Covid existence or

something along those lines,

then that is a barometer that

we can hold them to.

Whereas the Fed doesn't like

that kind of barometer because

they want to be able to kind of

ease and flow a little bit more

than the market really

is comfortable with.

I think

we'll see that in that March

April timeline where

expectations are.

We will start to see a drop.

They may hold it for

a month longer,

or two months even longer.

They've always said we're going

to keep rates higher for longer.

so I think we will see

that more. Yeah,

I would tend to agree.

And then we got this beautiful

jobs number this morning.

That is not good data.

Oh, yeah.

I was driving in and I was

listening to squawk,

and I think I almost wrecked my

truck. It's good for America.

I mean, truly it is.

I mean, we hate to say it,

but the jobs report guys came

in today, 353,000 new jobs.

That is not farming jobs.

That is outside of

that industry.

And I think the expectation

was like 180. We got 180.

So almost double the expected

new jobs for in January.

there was a general surprise

across the market

at this number.

You could see in the ten year.

I mean,

the ten year looked like they

were building a wall. I looked.

It was up 14 basis points from.

Yesterday,

just skyrocketing this morning

as I was watching it.

And that's because

when the Fed says,

we are looking for a reflection

of this tightening that

we've put on America,

jobs is one of the items that

they're looking for.

They're looking for a higher

unemployment rate.

They're looking for less new

jobs to show that companies are

out there still spending

the way they have been.

And normally in January,

we see that because of all of

the seasonal layoffs that they

had from having Christmas sales

and all the little part

time people, they add.

And so you usually do see that.

So this was quite an interesting

surprise, I think,

for everybody across the board.

Yeah,

January is one of the highest

months for layoffs of the year.

And to see 353,000, man,

that just really kind

of shook the market.

I think over the next week,

you're going to see investors,

maybe start to price in the

first cut, more into April,

more into May.

If you were listening to

a couple weeks ago,

Chris Brazell and I were on,

and he was pricing in the

first cut at April,

I think more may timeline.

And a lot of that I think is

just the fed also trying

to save face. I mean,

you got to remember last

quarter of last year,

they were still talking about

potential rate hikes.

This month is the first time

they've officially said they

think they're done raising

rates. Up until this point,

they have considered another

hike in the market.

Whether they were really

going to or not,

we'll never know,

but at least that's what they

were telling the market.

But let me talk to you people.

This is an election year.

That's true.

So I'm going to put my bet on

March because if we

get it in March,

we're going to start feeling the

effects coming April. May.

You don't put it on until

April or May.

We don't feel the effects

to come into August.

So the housing is not going to

look so good going

into first ever.

Whoever you do or don't like is

not going to be looking

too good.

And everybody wants it to look

really nice at this point.

So just thought,

just my little random head,

but it's what I've seen in the

past when we have gone through

election years,

I've always seen if we were

going to have a cut,

it seems like they would target

it around March. Yeah,

I agree with there.

I do think election year is

going to play a huge part in

this this year. Sherry,

when you talk about elections

and you talk about who's

potentially going to take the

helm next or retain the helm,

what do you think the market is

watching for when they

talk about this?

It's just

the market was probably looking

for in our world,

they always like the republican

side because it's less

government. Right? Yeah.

And so the market always kind

of likes to lean that way.

But then, of course,

the Democrats have also helped

us with oversight.

when we went through 2008,

those guys stepped in

and gave a lot of,

we got a lot of layering

and laws now,

but we could have tapped

brakes a little bit.

But at the same time,

we needed that correction

because we were Yahoo.

And all over the I think,

you know,

the market itself would love to

see a Republican back

in the office.

It just feels right.

We're getting ready to talk

about maybe cutting loose

conservatorship with

Fannie and Freddie.

A lot of people are ready to see

that happen, even the investors.

and I think a lot of people

are keeping that in mind,

because under democratic rule,

it's likely that we will not see

that dissolved until we do get a

Republican back in the office.

Another thing that I think is

big for this year and always

seems to line up with election

years is the new child tax

credit and how that is putting

more money in families pockets

and things like that.

do you think that will

have any effect on

interest rates, the market?

I mean,

when you look at the market,

you're always looking for

when you're looking for

an interest rate drop,

you're looking for less

money in the market,

less people spending,

more people holding on

to funds and stuff,

saving up for those rainy

day funds and stuff.

Do you think that an increase in

child tax credit could encourage

the fed to hold on longer

because there's more money in

America's pocket? Absolutely,

because there's more money being

spent. So without a doubt,

that's going to be something

to keep in mind.

It reminds me very much of the

stimulus checks that we received

a few years ago where

it was like it.

Was raining money when

it was Covid.

You just go to the mailbox

and there's money. Yeah.

And that money comes at a cost.

When you have that many,

much more people spending,

that's going to decrease the

expectation for the market

of a downturn. Right.

And that means there's going

to be more money in it.

There's people going to try and

make more money off of it.

so,

really a tricky balance there.

agreed. Yeah.

There's a fine line to walk on,

whether getting that approved or

not. Well, hey, real quickly,

because I'm going to jump into

something different here

with you today.

Talk about trigger leads.

You want to talk about them?

Let's do it. All right.

So, just to give people insight,

when anyone pulls your credit

especially in the mortgage

industry

the credit bureaus love to

sell your information.

And if you've ever noticed,

if you've applied

for a mortgage,

all of a sudden you get 100

calls from 100 different

loan companies,

and all you can think of is,

where did you get

my information?

You can thank the credit

bureaus for that.

They're selling your

information. Now,

there is a new law that is

going to be proposed,

and it's going in front of

Congress that would stop that.

So we're going to talk about

that more over the

next week or so.

I'm going to give you a lot more

details and where to go

to sign petitions,

because I think we all are

kind of over that.

It's just overkill.

and so just wanted to give you

a little insight on that.

And yeah,

that's my two cent worth today.

Thanks for the plug.

And now it's time for

market in a minute.

This is where we give you an

update on the condition of

the market each week,

no matter the topic of the show.

So you're always getting current

information each week.

This week,

we did have an unexpected report

from the Federal Reserve that

cautioned that inflation could

fluctuate unpredictably

throughout the year.

and what that can do is that can

result in a slower than desired

decrease in rates from the Fed.

If there's a concern that

inflation could go back up,

they may not be as tempted to

drop rates as they once were.

I do think that this is just

a little bit of reactionary

reading from December,

where we saw inflation go up

from 3.1 in November to 3.4.

But it's also not considering

that December is a high

shopping month.

there's going to be a higher

rate of temporary employment

happening.

It's a hard month to gauge

a year off of.

I think that's really what

we're dealing here with.

I think as we go into January's

readings and February's

readings,

we continue to see a decline

month over month.

We're going to see the Fed begin

to really talk about dropping

those rates again,

significantly. Of course,

every time they do talk about

it at a fed level,

you're going to see rates react.

So we want to make sure we're

monitoring our rates,

watching the ten year bonds.

We don't want to lock

clients in too soon.

We also don't want to lock

them in too late.

This has been a market

in a minute.

Tune in next week for the

next episode. Look,

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