Lowest Rates in Months After Inflation Data, But Volatility Risks Remain

There aren't many scheduled economic reports that are as hotly anticipated as was today's Consumer Price Index (CPI). The market's reaction more than validated the anticipation. What does all this mean for rates? Inflation is always an important consideration for interest rates. Higher inflation means higher rates, all other things being equal and 2022 has seen the biggest spike in decades to the highest inflation levels since the 80s and the highest mortgage rates in at least 20 years. The market and consumers have been waiting for some sign of relief when it comes to rates. Rates, in turn, have been waiting for some sign of relief on inflation. CPI is the most heavily traded inflation report. If there were only one place to receive an update on the fight against inflation each month, CPI would be it. For these reasons, it was no surprise that rates surged lower on November 10th when CPI finally suggested a meaningful shift toward lower inflation levels. But that was only one report and we'd seen another false start a few months prior that cautioned against early celebration. And so it fell to today's CPI data to confirm or reject the case presented back on November 10th. By coming in lower than the November 10th data and also lower than the median economist's forecast, the confirmation was essentially provided, thus paving the way for today's sharp drop in rates. There are a few "yeah buts." The first is/was that the improvement versus the previous month and the forecast was only one tenth of one percent in monthly terms--perhaps not compelling enough to put the inflation anxiety to bed. The second is that the market still has one other big hurdle to clear this week in the form of tomorrow's Fed announcement.

December 13, 2022 Download our Mobile App: Download our Mobile App: Mortgage Rate Watch Lowest Rates in Months After Inflation Data, But Volatility Risks Remain There aren't many scheduled economic reports that are as hotly anticipated as was today's Consumer Price Index (CPI). The market's reaction more than validated the anticipation. What does all this mean for rates? Inflation is always an i... (read more) MBS Commentary CPI Reaction Lives Up To The Hype. Fed on Deck CPI Reaction Lives Up To The Hype. Fed on Deck On most any other day, if MBS are going out the door with a 5/8ths of a point rally and 10yr yields are down 10bps, it's been a very good day. To be fair, ... (read more) Rob Chrisman LO to Broker, Reverse, Processing, Home Equity, Investor Cash Flow, DPA Products; Webinars and Training; Inflation Data The Buffalo Springfield sang, “There's something happening here… But what it is ain't exactly clear.” Those were historical times, and a reminder that things are always changing… In Whole Foods the other day I overheard a little girl speaking to anot... (read more) Mortgage Rates 30 Yr. Fixed Rate 6.28% -0.11% Rate Change Points Mortgage News Daily 30 Yr. Fixed 6.28% -0.11 0.00 15 Yr. Fixed 5.69% -0.07 0.00 30 Yr. FHA 5.75% -0.13 0.00 30 Yr. Jumbo 5.70% -0.05 0.00 5/1 ARM 5.80% -0.10 0.00 30 Yr. VA 5.80% -0.15 0.00 Updates Daily - Last Update: 12/13 15 Yr. Fixed Rate 5.69% -0.07% Rate Change Points Freddie Mac 30 Yr. Fixed 6.33% -0.16 0.00 15 Yr. Fixed 5.67% -0.09 0.00 Updates Weekly - Last Update: 12/8 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 6.41% -0.08 0.00 15 Yr. Fixed 5.84% -0.18 0.55 30 Yr. Jumbo 6.08% -0.27 0.50 Updates Weekly - Last Update: 12/7 MBS / Treasuries UMBS 30YR 5.0 99.94 +0.69 Price / Yield Change MBS UMBS 5.0 99.94 +0.69 UMBS 5.5 101.25 +0.52 GNMA 5.0 100.08 +0.58 GNMA 5.5 101.08 +0.41 Pricing as of: 12/13 5:31PM EST 10 Year US Treasury 3.5085 -0.1083 Price / Yield Change US Treasury 2 YR Treasury 4.225 -0.157 5 YR Treasury 3.653 -0.139 7 YR Treasury 3.600 -0.131 10 YR Treasury 3.509 -0.108 30 YR Treasury 3.542 -0.037 Pricing as of: 12/13 5:31PM EST Latest Video Jeremy Siegel: If Fed stopped looking at stale housing data they'd realize ... CPI reflects a sizable beat on inflation Four experts react to November's cooler-than-expected inflation report Super inverted yield curve doesn't work very well for markets, says Wells F... Around the Web CNBC Mortgage rates drop after CPI report, but the housing market is far from out of the woods CNBC Consumer prices rose less than expected in November, up 7.1% from a year ago Realtor.com The top 10 cities that offer homebuyers the most bang for their bucknone of them are in Florida CNBC The Fed has to portray itself as tough on inflation even as it pushes through a smaller rate hike Calculated Risk Blog Housing, Inflation and Why the Fed Should Consider a Pause CNBC The Federal Reserve is about to hike interest rates one last time this year. Here's how it may affect you Calculated Risk Blog BLS: CPI increased 0.1% in November; Core CPI increased 0.2% CNBC Hotel prices and airfare decline as travel demand cools after summer surge Calculated Risk Blog 2nd Look at Local Housing Markets in November; Another step down in sales in November CNBC Consumers see inflation easing considerably in the next year, New York Fed survey shows CNBC Treasury yields fall as investors await Novembers consumer inflation figures Brookings Inst. Banking, credit, and economic fluctuations: Bernankes Nobel Prize lecture CNBC Europe moves closer on limiting natural gas prices as Brussels looks to protect consumers

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