This is what really frustrates me!
On Monday, I blogged about how strong GDP (economic) growth pushes rates up: Why Mortgage Banks and Democrats Hope Trump Is Wrong.
And – I had to wait an entire day to be proven right… I hate that!
Anyway, GDP growth came in stronger than expected yesterday, propping interest rates up.
Barry Habib, however, reminds us that the GDP numbers are misleading, as they are influenced by inventory builds and government spending that are not indicative of true economic strength.
Barry also reminds us of how confusing the employment numbers are: A) We’re seeing lots of layoff announcements but not that many layoffs yet – because nobody wants to lay off during the holidays. B) We’re seeing higher unemployment, but not as many unemployment claims as we might suspect because people are moving to the gig economy (Uber driving and similar).
Barry’s point: the economy is weaker than the numbers might currently indicate, meaning rates will fall next year.
In contrast, on X this morning, I saw several economists predict a boom in late 2026 because of capital investment, falling energy prices, deregulation, and tax cuts (and boy, will that push rates up).
And there are all the crash bros too pointing out how the “everything” (stocks, real estate, and credit markets) bubble has gotta pop…(and boy, will that push rates down).
My point: The markets are as confused as every one else.
All you can do is keep making biscuits….
Happy Holidays From All of Us at JVM Lending!
We’re closing early today but will have seasoned Mortgage Analysts on call all day. We’ll be closed tomorrow for Christmas, but will be back on call Friday, Saturday, and Sunday.
