Tariffs on Wednesday the President unveiled new tariffs on imports to the US starting with a baseline of 10%. The method for the reciprocal tariffs was determined not by matching the percentage other countries are charging us but by taking our trade deficit with the country and dividing it by how much we import from the county. As we have seen with tariffs issued on Canada and Mexico there is likely to be much further negotiation. Even though tariffs are considered inflationary, the bond market responded favorably as the stock market sold off due to uncertainty.
Mortgage Rates – improved again in response to a ‘flight to security’ (traders moved money from the stock to the bond market) with the announcement of tariffs. Mortgage-Backed Securities (MBS) have reached their best levels since September 2024 and rates are down 0.625% from this time last year.
Jobs – the Bureau of Labor Statistics (BLS) released their monthly jobs report which showed 228,000 jobs created in March. This exceeded expectations but was tempered with negative revisions for the prior two months. Average weekly earnings increased 0.3% month over month and are up 3.2% year over year, a decline from last month’s number of 3.7%
Manufacturing – the ISM Manufacturing Index reported a 49 in March, a decline from the previous report of 50.3. Employment decreased sharply from 47.6 to 44.7 and new orders also declined from 48.6 to 45.2. Meanwhile prices increased from 62.4 to 69.4 mostly due to tariffs.
Mortgage Applications to purchase homes rose 2% last week and are up 9% year over year. Refinances fell 6% but remain up 57% year over year.