Yes, the Feds cut short term rates and we even saw a small price improvement yesterday (due to the bond market increasing after a new tariff was placed on China imports) in mortgages, BUT falling mortgage rates are never guaranteed and may not last long.

We are getting lots of inquires from clients who are confused about what a Fed Rate Cut means for mortgage rates. I am always happy to chat with you and your buyers about this sort of thing — give me a call! 

In the meantime, here is a great article that explains what drives mortgage rates up and down that you could share with anyone with questions. (More technical details about the market below the video!)

I am in Portland today for a Building Champions Mastermind Summit, but I am back in Colorado tomorrow ready to answer you and your buyer’s questions and pump out pre-approvals for you!

303-500-3839 //


For the industry folks, here is some technical information on how the capital markets are viewing the current economic picture this morning:

1. China Trade.  The Trump tariffs leave 30 days for a potential solution to be achieved that could prevent them from going into effect.  There could be ongoing negotiations to try and reach a compromise, although the senior US trade officials have concluded the meetings held this week in Shanghai.   If an agreement is reached before the September 1 deadline, it would push rates higher.

2. Today’s Economic news.   Today’s economic news releases were a mixed bag.   Nonfarm payroll growth came in at 164,000 new jobs in July, just a bit under market expectations.  The unemployment rate came in at 3.7% right where the market was predicting.  The monthly trade deficit came in slightly lower than expectations.   The market has not had a strong reaction to this morning’s releases and is about flat to yesterday.

3. 10-Year Treasury vs. Mortgage Rates.   Although the 10-year Treasury bond is the closest Treasury security that correlates to 30-year mortgage rates, in times of market volatility or uncertainty about future volatility, which we experienced this week, the 10-year Treasury will not move in price at the same correlation as MBS bonds for mortgages.    This is caused by investors selling their corporate or MBS bonds and buying Treasury bonds in times of crisis or uncertainty, as investors want very liquid and easy to trade assets during times of market volatility as an insurance policy if they needed to sell their assets quickly.   This phenomenon is sometimes called “flight to quality” and this is why the interest rate (yield) spread between Treasuries and all other non-government bonds will widen during times of volatility  or uncertainty.   We saw evidence of this today in how much 10-year prices moved compared to MBS prices.

4. Future Fed Cuts?   Based on Trump’s tweet last night, and the mixed economic news, the markets are currently expecting a good chance of another Fed 25 bps rate cut at their next scheduled meeting in September.

5. Next Week’s Economic News.   Aside from any unexpected tweets that may surprise the market, there are not any scheduled economic news releases until next Wednesday and Thursday when jobless rates and inflation rates will be released and this could drive the market if either or both of these releases come out much different than the market is predicting.   Bad economic news will push rates lower, and good will push them higher.


Brian Manning is a licensed Loan Officer in Colorado for Guild Mortgage Company; Regulated by the CO Division of Real Estate. Licensed in the states of Colorado and Florida, NMLS #324952. The postings on this blog don't necessarily represent the positions, strategies or opinions of Guild Mortgage Company or its affiliates. This information is not guaranteed to be accurate and shall not be construed as a guarantee of loan approval. All loans are subject to underwriter approval, and are subject to change without notice.