Portland Mortgage Market Update — August 1, 2025

This week had it all: Fed Meetings, Jobs Reports, Inflation Readings, and Tariffs. Going chronologically, the beginning of the week we had the Job Opening and Labor Turnover Survey (JOLTS report) which came in showing about 113K fewer job openings than anticipated. This generally does not bode well for the health of the economy, because fewer job openings means either companies are feeling a pinch and don't want to expand/hire new people or employees may not feel comfortable leaving their current job, knowing the market is tight right now. Rates started a tentative march lower on this news, knowing there was a lot more to come.

Wednesday was Fed Day! Aaand they didn't do anything. Notably, there were two members of the Fed that dissented with the decision to keep the rate the same (the two Fed members who are angling to take the Chairman Powell's position), which was the first time in 32 years that two governors dissented in a meeting. In his post-meeting remarks, Powell mentioned that he thought the meeting was one of the more productive meetings they have had, praising discussions of differing opinions the members had. Wednesday was also the day the GDP report came out for Q2 which came in at 3%-- higher than the expected 2.4%. This was kind of met with a "yeah, so" because the numbers are clouded by Tariffs as companies front-loaded inventory in Q1 to get ahead, then stopped or slowed importing in Q2. If you take an average of the two quarters of imports the actual GDP comes in around 1.2% which is… not great.

Thursday was the PCE report, which is the Fed's preferred measure of inflation. It came in at a 0.3% increase in June, which was right at what was expected. The market took this in stride, but looking ahead it will be very difficult to make headway on the core inflation because the readings from last Fall are very low and the replacement numbers coming in will almost certainly be higher. We likely won't see inflation come back down until January, which means we are going to have to rely on a softening labor market to provide some impetus for the Fed to take quicker action. Will Friday's BLS report be the one to save the day for mortgage rates?

Shockingly, it was! Today's BLS report FINALLY reflected what the real world was seeing. Traders expected 100,000 new jobs created in July, but it came in at 73K. In keeping with tradition, the report also revised May and June's report down sharply lower by a combined 258,000 jobs. Between that and the sweeping new tariffs set in place overnight, rates are rallying right now! It's a great weekend to write an offer or refinance!!