Interest rates are like moody teenagers — they take cues from bonds, and bonds, in turn, take cues from economic data. But lately, thanks to the government shutdown, the data has been… well, grounded. No new reports, no guidance, just the sound of traders nervously sipping coffee and refreshing their screens.
This week, however, brought a rare gift: non-government data stepping in to fill the silence — and boy, did bonds perk up.
Wednesday: The Plot Thickens
The excitement started midweek when the ADP employment report showed up first to the party. While the overall job count is still hanging out in the “meh” zone, it managed to climb out of the negative territory faster than anyone expected. Think of it as that coworker who’s been late all month but finally showed up on time — it’s progress!
Then, before lunch could settle, the Institute for Supply Management (ISM) dropped its services sector index, and it was… robust. Not just “above average” robust — we’re talking “3rd highest new orders reading in over two years” robust. The kind of news that makes bond traders sit up straight and mutter, “Uh-oh.”
Naturally, stronger data meant bond yields (and mortgage rates) decided to stretch their legs and rise to their highest levels in almost a month by midweek.
Thursday: Enter the Underdog
But just when we thought rates were heading north for the winter, Thursday came along with a twist. A lesser-known player named Revelio — a firm that cooks up a synthetic job count using all sorts of fancy aggregated data — released its report. Normally, nobody outside of economics nerd circles would even know this thing exists, but with official data still on pause, Revelio had its moment in the spotlight.
Its verdict? A modest decrease in job counts for October. Cue the dramatic reversal music.
Suddenly, markets were like, “Wait, maybe things aren’t that hot after all,” and bond yields cooled off faster than your coffee when you forget it on your desk.
Friday: Feelings Take Over
As if that weren’t enough drama for one week, Friday rolled in with a major downer: the Consumer Sentiment survey. Turns out, Americans are feeling pretty gloomy — the “current conditions” reading hit its lowest point in more than 70 years. That’s right, folks, even lower than disco-era malaise.
This one-two punch from weaker sentiment and softer labor data helped push bonds (and therefore rates) right back down, erasing much of Wednesday’s rise.
The Bottom Line
Rates took two steps up and two steps back — a little dance that left us roughly where we started, but with everyone slightly dizzy from the moves.
Bonus Round: The Credit Score Confusion
Before we wrap, a quick PSA on the end-of-week buzz about Fannie Mae “removing its minimum credit score requirement.”
This news spread faster than a rumor at a high school lunch table — and just like most rumors, it’s mostly misunderstood. No, people with scores under 620 are not suddenly getting conventional loans. No, unicorns are not flying out of your credit report.
In reality, this is more of an operational tweak that affects a very small group of edge-case borrowers. If your score is under 620, you’ll still be denied — it’s just that the official reason for denial will sound slightly different.
In short: don’t get too excited, don’t panic, and maybe just pay that credit card bill on time.