For the week ending October 31, 2018, mortgage rates had declined due to stock market volatility, and then recovered in response to the release of robust economic data by the U.S. Department of the Treasury.
The October 2018 jobs report has market watchers and experts trying to assess how it will impact the Federal Reserve's rate movements over the course of 2019, writes Zillow director of economic research Aaron Terrazas, "core output and employment indicators remain solid, and inflation is picking up modestly and healthily," and strong wage data could drive overall confidence in the U.S. economy, and in turn future interest rate hikes, "despite the turmoil on Wall Street and some potentially disconcerting signals such as soft housing data."
A frantic week in the stock market, which saw a series of sharp rises and slumps, resulted in an initial decline in rates. However, much like last week, the decrease was less than we would have expected, given the circumstances, as a series of strong economic releases – including GDP, employment costs, and private employment numbers– all came in above expectations, signaling the continued robustness of the U.S. economy. Another buoy for rates was Wednesday morning’s publication of the Treasury Department’s plans to increase the size of its bond auctions in an effort to help fund growing fiscal deficits.