The jobs report just changed the Fed rate hike math

Plus: Rates hit a 13-month high for the fifth straight week

August 07, 2026

👋 Good morning. Thanks for starting your day with us! If this email was forwarded to you, subscribe here. Today’s newsletter is 579 words, a 2.5-minute read.

Disclaimer: Average mortgage rates as of August 06, 2026. © MND Daily Rate Index.

1. The jobs report just changed the Fed rate hike math

The July jobs report just changed the Fed rate hike conversation. The economy unexpectedly lost 23,000 jobs — the consensus was a gain of 83,000 — and prior months were revised sharply lower, bringing the 12-month average down to just 34,000 jobs per month.

  • Nonfarm payrolls: -23,000 (vs. +83,000 expected)

  • Unemployment rate: fell to 4.1%, but only because 264,000 people left the labor force

  • Labor force participation: 61.4%, lowest in more than five years

  • Average hourly earnings: up just 3.2% year over year, lowest since May 2021

  • 12-month payroll average: revised down to 34,000

"Before today, many were expecting that the Fed had no choice but to raise rates in order to fight stubbornly high inflation, because the job market was so strong, but this report shows that isn't the case." — Chris Zaccarelli, Northlight Asset Management

Odds of a September hike fell to 44% immediately after the report. Treasury yields plummeted and stock futures rallied.

2. Rates hit a 13-month high for the fifth straight week

The 30-year fixed averaged 6.69% for the week ending August 6, according to Freddie Mac — the highest since late July 2025 and the first time in 10 months the benchmark has exceeded its year-ago level of 6.63%.

The 10-year Treasury briefly hit an 18-month high above 4.7% before pulling back on reports of a possible U.S.-Iran shipping agreement, which Iran denied. With Warsh withholding forward guidance, markets are moving on each data release alone.

"While mortgage rates continue to influence affordability, the housing market is showing signs of adjustment, with listing prices modestly below year-ago levels," said Sam Khater, chief economist at Freddie Mac.

A MESSAGE FROM THE HUSTLE

Stop Dabbling With AI and Start Earning With It

Ready to stop using AI as a search engine and start using it as an income engine?

The Hustle's "200+ AI-Powered Income Ideas" is your free playbook for turning the most overhyped technology of our time into actual cash.

Inside you'll find:

  • 200+ real, vetted ways to generate income with AI, spanning freelance services, digital products, content creation, and emerging markets

  • Actionable strategies built for non-engineers, so your technical background (or lack of one) won't hold you back

  • Ideas aligned with where the market is actually heading, not where it was two years ago

Subscribe free today and unlock the full guide. The people already cashing in aren't smarter than you, they just started earlier.

3. More Nuggets

💸 Chase executive says sustainable payments matter more than rate forecasts. (MPA)

🤝 Realtracs and Zillow reach a deal — but Zillow's listing standards stay intact. (Inman)

📊 loanDepot nears break-even, but adjusted profitability still lags. (NMP)

📰 Pennymac rolls out VA partial claim option ahead of November deadline. (HousingWire)

4. Pending home sales hit a five-month low as rates push buyers to the sidelines

Signed contracts dropped 3.7% week over week to their lowest level in more than five months — the steepest weekly decline since 2022 — as the 30-year fixed hit its highest level since late July 2025.

Contract signings were also 1.9% below year-ago levels. At current rates, the median monthly payment holds at $2,631.

Supply isn't helping much. New listings edged up 1% but active inventory actually fell 1.5%, keeping months of supply at 3.6 — well below the 4-5 months considered balanced. The median sale price rose 2.9% year over year to $406,362.

5. UWM posts $451M loss and suspends dividend after Two Harbors hedge backfires

UWM's failed bid for Two Harbors cost the company more than the deal itself. The hedge it set up to protect against the acquisition moved against UWM when the deal fell through, driving a $451.9 million net loss in Q2 — a reversal from $170 million profit last quarter.

"Because of Two Harbors, we were over-hedged," Ishbia told investors. "The market moved against us, and it's a onetime event that won't happen again."

To shore up its balance sheet, UWM announced a $2.05 billion equity investment from Oaktree Capital Management and the Ishbia family's SFS Group Capital, bringing its debt-to-equity ratio back in line with industry norms. The board also suspended the quarterly dividend, with Ishbia noncommittal on when it returns.

☀️ You’re all caught up. See you on Monday!

🚀 Wanna help our newsletter grow? Forward it to a friend or colleague.

Would you like to receive a ready-to-send weekly marketing email for your realtors and/or clients? Start your 30-day free trial here.

Was this email forwarded to you? Subscribe here.