Mortgage Rates Shrug Off Seemingly Threatening Inflation Data to hit 5 Month Lows

Yesterday was all about the CONSUMER Price Index (CPI), which helped mortgage rates drop at the 2nd fastest pace of the year. Today brough the PRODUCER Price Index (PPI), and the message was a bit different. While PPI is not in the same league as CPI in terms of its impact on rates, there have been several recent examples that have left a mark on the market, for better or worse. When this morning's installment came out, it looked like we'd have another example to count, and not the good kind. Between the new headline and the revision to last month's numbers, annual PPI ended up a half a percent higher than the market expected. If that sort of thing happened in CPI, rates would absolutely skyrocket. Even though it was a PPI problem, it still would not have been a surprise to see at least SOME upward pressure today. But instead, rates managed to move LOWER, albeit not by much. Still... any improvement in the wake of such numbers requires an explanation. In this case, it came down to the underlying components of the PPI data not translating to the consumer-facing inflation metrics that guide rate policy. In other words, sometimes higher PPI suggests upward pressure on the PCE inflation data (the broadest national measure of consumer inflation and the most closely-watched by the Fed), but today's report did not. Bonds initially panicked for a split second, but then eased into modestly stronger territory and stayed there all day without any drama.

July 12, 2024 Download our Mobile App: Download our Mobile App: Mortgage Rate Watch Mortgage Rates Shrug Off Seemingly Threatening Inflation Data to hit 5 Month Lows Yesterday was all about the CONSUMER Price Index (CPI), which helped mortgage rates drop at the 2nd fastest pace of the year. Today brough the PRODUCER Price Index (PPI), and the message was a bit different. While PPI is not in the same league... (read more) MBS Commentary Bonds Holding Yesterday's Gains Despite Hotter PPI The Producer Price Index (PPI) is certainly not in the same league as CPI when it comes to bond market impact, but there have been several notable reactions in the past year. It was a concern, then, to see core PPI come in 0.2 higher than expec... (read more) Rob Chrisman HMDA Data, Correspondent and Wholesale Products; Inflation and Rate Updates “I’m sorry, but you can’t always be ‘experiencing a higher volume of calls than average.’ That’s not how averages work.” The “average” person has a student loan, or a car loan, or credit card debt, or all three. Throw in mortgage interest rates aroun... (read more) Mortgage Rates 30 Yr. Fixed Rate 6.82% -0.03% Rate Change Points Mortgage News Daily 30 Yr. Fixed 6.82% -0.03 0.00 15 Yr. Fixed 6.32% -0.02 0.00 30 Yr. FHA 6.25% -0.04 0.00 30 Yr. Jumbo 7.05% -0.04 0.00 7/6 SOFR ARM 6.75% -0.05 0.00 30 Yr. VA 6.26% -0.07 0.00 Updates Daily - Last Update: 7/12 15 Yr. Fixed Rate 6.32% -0.02% Rate Change Points Freddie Mac 30 Yr. Fixed 6.89% -0.06 0.00 15 Yr. Fixed 6.17% -0.08 0.00 Updates Weekly - Last Update: 7/11 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 7.00% -0.03 0.60 15 Yr. Fixed 6.63% +0.07 0.61 30 Yr. Jumbo 7.13% +0.02 0.38 Updates Weekly - Last Update: 7/10 MBS / Treasuries UMBS 30YR 6.0 101.15 +0.22 Price / Yield Change MBS UMBS 6.0 101.15 +0.22 UMBS 6.5 102.33 +0.18 GNMA 6.0 100.96 +0.09 GNMA 6.5 101.79 +0.18 Pricing as of: 7/12 5:31PM EST 10 Year US Treasury 4.1843 -0.0287 Price / Yield Change US Treasury 2 YR Treasury 4.458 -0.057 5 YR Treasury 4.106 -0.038 7 YR Treasury 4.128 -0.031 10 YR Treasury 4.184 -0.029 30 YR Treasury 4.397 -0.026 Pricing as of: 7/12 5:31PM EST Latest Video Big banks under pressure: Here's what you need to know July consumer sentiment sinks to lowest level since November Inflation eases more than expected Wholesale prices rose 0.2% in June, slightly hotter than expected Around the Web Calculated Risk Blog 2nd Look at Local Housing Markets in June Marketwatch One part of the housing market is doing brisk business, says analyst who called 2008 housing crash CNBC Wholesale prices rose 0.2% in June, slightly hotter than expected CNBC Here's the inflation breakdown for June 2024 in one chart Calculated Risk Blog Q2 GDP Tracking: Around 2% Calculated Risk Blog Part 1: Current State of the Housing Market; Overview for mid-July 2024 CNBC Inflation falls 0.1% in June from prior month, helping case for lower rates CNBC Treasury yields rise as investors digest inflation data Marketwatch Feds Musalem wants more proof inflation is slowing before backing interest-rate cuts CNBC Oil prices rise as inflation eases, bolstering market hopes for Fed rate cut later this year Calculated Risk Blog Leading Index for Commercial Real Estate Increased 10% in June Calculated Risk Blog Weekly Initial Unemployment Claims Decrease to 222,000 CNBC Treasury yields hold steady ahead of latest consumer inflation data

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