Jobless Claims & Fed Funds Rate

Initial Jobless Claims numbers are in from last week showing 840k new claims. Once you add back in Pandemic Employment Assistance and other unemployment programs, the United States has 25.5M people receiving some sort of unemployment assistance. This is about 18x more people than this same time last year. While this number is slowing ticking down, it is important to understand where the country is when we hear good news regarding unemployment dropping.


Fed minutes from last month are out and state that the Fed Funds Rate could be held at 0% through 2023. A lot of consumers assume that if the Fed Funds Rate is dropped, mortgage rates will follow. However, it is important to understand that the two are separate and the last time the Fed Funds was held at 0%, we actually saw mortgage rates rise. We have addressed lot of inflationary pressure in the market in the last few weeks of commentary that have the potential to push mortgage rates higher.


Mortgage backed securities are still supported by their double floor of the 25 and 50 day moving averages. However, they are still being pinched by their ceiling. We are holding a locking bias due to the room to fall if mortgage backed securities are pushed below their double floor.

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