Could the latest unemployment report signal a turning point for mortgage rates?
In the December 9 episode of the Optimal Insights podcast, host Jim Glennon , VP of hedging and trading client services at Optimal Blue, is joined by Jeff McCarty , VP of hedging and trading product, Alexander Hebner , hedge account manager and market specialist, and Kevin Foley, CFA , director of product management. Together, they dissect the latest economic data, discuss the implications of tariffs, and provide valuable insights for mortgage professionals.
Here’s what you need to know this week.
Key Insights and Trends
Economic Update
➕ Unemployment Report: The latest report shows a significant rebound with 227,000 new jobs added, indicating a strong job market.
"The job market remains strong when you look at headline numbers." - Alex Hebner
➕ Interest Rates: Mortgage rates have seen a slight decrease, with the conventional 30-year interest rate at 6.56%, leading to a 20% increase in refinancing activity.
Tariffs and Their Impact
Tariffs have a long history in U.S. economic policy, dating back to the founding of the nation when they were a primary source of federal revenue. The new administration's proposed tariffs could be five to ten times higher than current levels, potentially impacting inflation and interest rates.
Impact on the Market
➕ Higher tariffs could lead to increased costs for imported goods, driving up inflation and, consequently, mortgage rates.
➕ Specific sectors, such as housing, could see direct effects. For example, tariffs on Canadian lumber could increase housing prices, affecting affordability.
Arguments For and Against
Pros:
➕ Revenue Generation: Increased tariffs could boost federal revenue, potentially reducing the deficit.
➕ Geopolitical Leverage: Tariffs can be used as a tool to achieve foreign policy goals.
Cons:
➕ Inflation: Higher tariffs could lead to increased consumer prices, driving up inflation.
➕ Market Uncertainty: The unpredictability of tariff implementation could create market volatility.
Practical Actions You Can Take Today
Monitor Economic Indicators
➕ Keep an eye on key economic reports, such as unemployment and inflation data, to anticipate market movements.
Stay Informed on Economic Policies
➕ Tariffs: Be aware of potential changes in tariff policies and their impact on the economy, as discussed in the upcoming podcast episode.
Upcoming Events
➕ Optimal Blue Summit: Don’t miss the Optimal Blue Summit taking place from February 3 – 5, 2025 in San Diego. This client-exclusive event will feature sessions on AI trends, profitability strategies, and market insights, along with panels from top industry leaders. Early-bird pricing is available until the end of the month, so be sure to register!
Use code AHEAD25 for a special discount to help you get ahead in 2025.
For more information about these topics, listen to the full podcast episode on major platforms or watch the full episode on LinkedIn/YouTube.
Listen on all major podcast platforms: https://optimal-insights.captivate.fm/listen
The views and opinions expressed in this program are those of the speakers and do not necessarily reflect the views or positions of Optimal Blue, LLC.