Economic indicators

Treasuries resumed their rally on Tuesday as further labor-market slowdown reinforced speculation the Federal Reserve will be able to cut interest rates next year to prevent a recession.

While the government-sponsored enterprise cut its origination forecast for this year, the Mortgage Bankers Association's updated forecast was unchanged from its October prediction.

Only 65.8% of surveyed households said they would be able to come up with $2,000 if an unexpected need arose within the next month.

The so-called core consumer price index, which excludes food and energy costs, increased 0.2% from September, Bureau of Labor Statistics data showed Tuesday.

Broader economic factors, including growing household debt, are also likely to keep the housing market stagnant, Freddie Mac said.

High mortgage rates and the lack of inventory for sale pushed the sector into a downturn twice recently - between May and November last year and in May of 2023 - according to First American

More than half of 526 respondents to a Markets Live Pulse survey said that personal consumption — the most important driver of economic growth — will shrink in early 2024, which would be the first quarterly decline since the onset of the pandemic.

"There is nothing that is saying we need to do anything imminent anytime soon," the Federal Reserve governor said in an interview on CNBC Tuesday.

Stock futures fluctuated on Wednesday as the latest data showed the U.S. economy expanded at a slower rate than previously thought in the second quarter, fueling speculation the Federal Reserve is nearing the end of its rate-hike cycle.

Rising interest rates during June worked to hold potential new homebuyers out of the market, the Mortgage Bankers Association's Builder Application Survey found.