Market Volatility, AI Disruptions, and Interest Rate Swings: What You Need to Know
I wrote this article February 1st, 2025 for my LinkedIn Newsletter. While it appears out dated to anyone reading this, the underlying message remains the same. This is something I’ve discussed in various different ways on YouTube Videos, TikTok Videos and various social media posts. If that helps even one person understand how volatile our interest rates are this year then I’ve done my job to inform. See below, after I show my main article and what happened, I’ll also paste a follow up newsletter article. Not something I typically do so soon after an initial article. But if I feel it’s newsworthy that is how I used my LinkedIn Newsletter. I’ll share that link below. It is mainly business focused but also has various thoughts I have on business adjacent issues as well. It is a bi-monthly newsletter with market updates sometimes once a week. This depends on what is happening. I don’t write fluff, I write what matters to me and what I feel will bring value to others. :)
https://www.linkedin.com/newsletters/my-partners-my-priority-7280400821689729024/I
February 1st, 2025
The last week of January was a wild ride for the markets. Some of us even woke up one morning to the words “Black Swan Event.” That certainly got my attention, but as the story evolved, it was eventually downgraded to a “Gray Swan.” While that initial rush to check how bonds were reacting was intense, it reminded me that this year will likely be filled with unusual events, knee-jerk reactions, and unpredictable swings in stock and bond markets.
What Is a Black Swan Event?
A Black Swan Event is an unpredictable occurrence with severe consequences that significantly disrupt financial markets. These events—like the 2008 financial crisis or the COVID-19 pandemic—cause panic, massive market shifts, and rapid interest rate changes. A Gray Swan is similar but slightly more predictable, meaning investors might see it coming, even if they aren’t fully prepared.
While this week’s volatility didn’t reach actual Black Swan status, it was enough to shake up the markets and impact interest rates.
AI Shake-Up: DeepSeek vs. ChatGPT
Last week, one of the biggest market movers was the emergence of DeepSeek, a new AI model that reportedly built itself faster, cost less, and is just as good as ChatGPT. This news triggered fears that domestic AI stocks were overvalued, leading to heavy selling.
As money fled the stock market, it moved into bonds, driving rates lower—illustrating the classic inverse relationship between stocks and bonds.
Expect More Volatility in 2025
I recently told a team I was talking to about the 2025 markets. 2025 will likely bring one unexpected event after another. The result? Sharp, short-lived market reactions rather than sustained trends. Instead of days of predictably lower rates, we might only get hours before yields spike back up. I shared that insight before the “black downgraded to gray” swan event.
This pattern means anyone looking to lock in a mortgage rate should stay informed and be ready to act quickly when opportunities arise.
February’s Key Market Data to Watch
The first week of February brings a slew of jobs data, which will heavily influence interest rates:
JOLTS Report – Job openings and labor turnover
ADP Employment Report – Private sector job growth
Jobless Claims – Weekly unemployment data
BLS Jobs Report (Friday) – The big one; sets the tone for market expectations
Deciding when to lock in a rate ahead of Friday’s data will be key. I will be monitoring how these reports impact my clients and partners.
Technical Market Snapshot
UMBS 6.0 Mortgage-Backed Securities: 100.77 (-2bps) – Slightly worse than yesterday but not enough to matter.
10-Year Treasury Yield: High of 4.801% in January, low of 4.51%, ending the month at 4.540%. I’ll take that as a win!
Control What You Can, Ignore What You Can’t
The market will always be unpredictable. Interest rates will move daily, even a few times a day, and—sometimes dramatically. Stressing over every uptick and downtick won’t help. Instead of obsessing over factors beyond your control, focus on what you can do:
✔️ Stay informed, but don’t panic.
✔️ Work with professionals who understand market movements.
✔️ Take action when opportunities arise, there will be plenty!
Stay the course, and let’s navigate this unpredictable year together. 🚀
#MortgageRates #MarketUpdate #FinanceNews #InterestRates #DeepSeek #AIStocks #HousingMarket #StayInformed #Swans
Update: 6/13/2025—- Nothing has changed and Everything has changed. The market uncertainty and volatility continues. We’ve had positive economic news on inflation, we’ve had on going uncertainty with tariff wars. Huge Tariffs, Smaller Tariffs. Continued escalations in the middle east.. I continue to monitor and watch. I truly have no idea where rates will end up in the next 30 days. I’ll do a full new update soon!
