Economic Report 06.03.19

KEY MARKET INDICATORS as of June 03, 2019

Long-Term Interest Rates Lower Again

Interest rates headed lower again last week. The yield on 10-year Treasuries fell by 20 basis points to 2.12%, while the 30-year conventional mortgage rates fell below 4% for the first time since January 2018. Increasingly, investors expect the Federal Reserve to cut rates in the second half of 2019. The Fed funds futures market has priced in a 40% chance for one rate cut, and almost 30% chance for two or more rate cuts by the end of 2019. Investors expect that the Fed will cut rates in the next few months in response to slower economic growth. Estimates by economists at the New York Fed and the Atlanta Fed suggest that economic growth will likely slow from 3% in Q1 to 1.3-1.5% in Q2. Subdued inflation, which has been consistently below the Fed’s 2% target this year, should also give the Fed flexibility to lower rates. The decline in long-term interest rates should help improve housing affordability and make homebuying more attractive.

Tian Liu, Genworth Mortgage Insurance Chief Economist
919 807.9584

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Disclaimer: Opinions, estimates and projections in this report constitute the current judgment of the author as of the date of this report. They do not necessarily reflect the opinions of Genworth Mortgage Insurance and are subject to change without notice. Genworth Mortgage Insurance has no obligation to provide revised assessments and assumes no duty to update information in the event of changed circumstances. While we have gathered this information from sources believed to be reliable, Genworth Mortgage Insurance cannot guarantee the accuracy of the information provided. Certain data discussed in this report is publicly available only on a time delayed basis. Genworth Mortgage Insurance strives to analyze data as it becomes available, but makes no representation that all data is reviewed immediately upon release. 

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