A concerning manufacturing report
Over the weekend, interest rates held on to last week’s gains, with recession fears back in full swing due to the weakest manufacturing report since the financial crisis. Granted, manufacturing only makes up 12% of the U.S. economy, but concerns still loom over the global slowdown affecting consumers.

A look at the week ahead
Now may be a good time to lock because there’s a lot this week that could affect mortgage rates. Powell speaks tomorrow and there is a ton of Treasury supply coming into the market. Meanwhile U.S./China trade talks have the potential to present positive headlines and two rate cuts are still expected for the remainder of 2019—all of which could negatively affect mortgage rates.

Rate cut repercussions
Why are rate cuts potentially bad for mortgage rates? Because A: they stimulate economic growth and B: they steepen the yield curve. Both are good for risk-on assets, like stocks, and bad for safe harbor investments, like bonds. Also, rates have had a pretty good run since September 13—essentially back to YTD lows, and perhaps close enough to take some chips off the table. Mortgages are doing well here—actually up a tic even though UST yields are up a smidge.