Previously, on Days of Our Lives...
The focus this week was on rates and the Fed, and for good reason. It became a very, very interesting week for both economic reports and industry updates.
Oil-Inflation: We're essentially at 0% chance of an Iran resolution before midterms at the least. It's also worth looking domestically at how this affects us: Oil prices are already constantly flirting near $100. However, it's worth noting that the strategic oil reserves we've been using? They're nearing the real floor.
It's easy to see we have 284.6 million barrels of oil in reserve and feel it's okay. When you learn that 250m is the floor before we start getting into the dregs and risking the infrastructure of the giant underground caverns? Well, suddenly we have less wiggle room.
I'll be curious to see how that impacts flights and travels when we get there.
Other Inflation: PCE came in at .2 MoM, and 3% annualized. Headline at .3% MoM and 3.4% for hte year. GDP came out great, 2.2% annualized versus the 1.5% forecast. Good news?
Well, most of the Fed members made comments that inflation is their main concern. Not great for rate forecasts. However, some... silver lining?
Labor: Labor came out positive to start. JOLTS came in at 7.08M for job openings versus a 7.2 forecast. ADP came out with 90K payroll versus 72K forecast, and Challenger job cuts showed an 18% decrease since August. Good news!
Then came today. Payrolls were at 29K versus consensus at 93K. Unemployment is up to 4.2% over the 4.1% forecast, and earnings are basically flat. We revised prior months down 60K. Ouch. It does, potentially, help our rate cast forecast.
Rates: Bumped up 25BPS for the week, the largest increase in quite a while, up to 7.28% versus last year's 6.34%. Ouch. No surprise, purchases down another 4% and refinances down another 9%.
Vantage: Pulte tweeted that Vantage would now be on the same LLPA as FICO. Risk-based pricing? This may be our entrance into Vibe-based pricing.
UAD: And vibe-based deadlines? The deadline, touted as unmovable, has been moved. Welcome news as large sections of the country are still dealing with appraisers unwilling to adapt to the new UAD requirements. Most lenders I know are still looking to implement now, but have 2.6 to rely upon for more rural markets.