Central bankers won't be loving Friday's employment numbers.

Canada created an overspicy 41,000 jobs in April, doubling up the consensus forecast (which is wrong 4 out of 5 times, by the way, reports Scotiabank). Immigration-fuelled population growth distorts employment gains, so potent job creation isn't as inflationary as one might think.

The U.S. Federal Reserve gave no indication it was pressing the pause button after Wednesday's 25 bps hike. Instead, it said the next best thing.

"A decision on a pause was not made today," Jerome Powell remarked in his press conference. But "We feel like we are close, or maybe even there...We're no longer saying that we “anticipate” [further policy firming]."

That's about as much as you're going to get from a Fed worried that it may not have done enough to ensure inflation is headed back to 2%.

Mortgage consumers may enjoy an additional quarter of rock-bottom uninsured mortgage rates. That's thanks to delays in RBC's takeover of HSBC Canada.

U.K.-based HSBC now expects RBC's $13.5-billion purchase of its Canadian unit to close in Q1 2024. Initially, it projected the end of this year.

The move coincides with the Competition Bureau's just-announced request for information (RFI)—which solicits feedback from stakeholders. The Bureau is rightly concerned about a "substantial lessening or prevention of competition" thanks to RBC's purchase. Moreover, mortgages are pretty much the regulator's #1 focus, based on HSBC's business makeup, the RFI's wording and a top competition lawyer we consulted.

Today's report

The latest stories posted on MortgageLogic.news...

 •  The Fed's most-loved spread ♥️

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This & That

• Updated simulator: The Amortization Simulator was updated on Monday with the latest Bank of Canada implied rate path. Download it here. The timeframe for rate cuts got pushed out a bit since the last version, but not considerably. As a reminder, the projected timing for rate easing comes from derivatives pricing in the bond market and is fully customizable.

Avid rate-watchers monitor interest rate spreads all the time. Among other things, spreads help project the likelihood of a recession and the path for interest rates.

A spread, or "term spread," simply refers to the difference in yield between two maturities. For example, the most-quoted term spread is the 10-year-minus-2-year, or "10y-2y" for short.

That said, of all the different spreads out there, few are more accurate at predicting recessions than the near-term forward spread (NTFS).

Today's reports...

Stories posted on MortgageLogic.news this weekend:

•  Debt ceiling black swan

•  The latest from RateLand

This & That

The Fed's likely and much-anticipated 25-bps hike on May 3 is expected to be its last act of tightening this hiking cycle.

If so, it would leave the world's most influential policy rate at the 5.125% peak forecast by the Fed itself in its latest Summary of Economic Projections.

The focus would then shift to speculation on rate-cut timing, and another waiting game would ensue. For the Bank of Canada and Fed to turn dovish at that point, one of two things would have to happen: