Record Single Day Drop in Rates After Inflation Comes in Cooler

Heading into this week, we knew that Thursday's Consumer Price Index (CPI) would be critically important. It did not disappoint. CPI is one of two key inflation reports in the US. PCE (Personal Consumption Expenditures) is the other big index, but because CPI comes out 2 weeks earlier, it gets almost all of the market's response. The response to Thursday's CPI was record setting in at least one important way, and still astonishing in many others. Let's talk about why. Why was this week's CPI so important? First off, almost every CPI report has been important in 2022. No other economic report has caused more volatility for the bond market. Because bonds dictate interest rates, we can also say CPI has caused just as much volatility in the mortgage world. CPI is the king of economic data in 2022 because inflation is the dominant focus of the financial market and the Federal Reserve (aka "the Fed"). The Fed sets policies intended to keep inflation at a low, stable level. Runaway inflation causes the Fed to hike interest rates in order to slow down the demand side of the economy. In the post-pandemic environment where a good amount of inflation is thought to be driven by the SUPPLY side of the economy, that's resulted in the Fed being particularly aggressive in trying to tamp down demand.

November 10, 2022 Download our Mobile App: Download our Mobile App: Mortgage Rate Watch Record Single Day Drop in Rates After Inflation Comes in Cooler Heading into this week, we knew that Thursday's Consumer Price Index (CPI) would be critically important. It did not disappoint. CPI is one of two key inflation reports in the US. PCE (Personal Consumption Expenditures) is the other big index,... (read more) MBS Commentary CPI Data Resoundingly Delivers on Promise of a Big Reaction This morning's trading action offers resounding validation of the market's hyperfocus on this particular CPI report. In a month where the average price of diesel and gas were markedly higher than the previous month, even HEADLINE CPI (which inc... (read more) Rob Chrisman Rate Sheet, Licensing, AMC, Sales, AOT Products; Homebuyer Study; CPI Numbers Drive Down Rates Okay, tomorrow is a holiday for many, but let’s not forget those veterans during the rest of the year. (Warning: tissues required.) Switching gears 180 degrees, say hello to Nevada’s new state Treasurer. (Warning: rated PG?) Moving back to mortgages ... (read more) Mortgage Rates 30 Yr. Fixed Rate 6.62% -0.60% Rate Change Points Mortgage News Daily 30 Yr. Fixed 6.62% -0.60 0.00 15 Yr. Fixed 6.00% -0.56 0.00 30 Yr. FHA 6.20% -0.57 0.00 30 Yr. Jumbo 6.10% -0.22 0.00 5/1 ARM 6.12% -0.63 0.00 30 Yr. VA 6.25% -0.57 0.00 Updates Daily - Last Update: 11/10 15 Yr. Fixed Rate 6.00% -0.56% Rate Change Points Freddie Mac 30 Yr. Fixed 7.08% +0.13 0.90 15 Yr. Fixed 6.38% +0.09 1.00 5/1 Yr. ARM 6.06% +0.11 0.20 Updates Weekly - Last Update: 11/10 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 7.14% +0.08 0.77 15 Yr. Fixed 6.40% +0.03 1.13 30 Yr. Jumbo 6.50% -0.05 0.78 Updates Weekly - Last Update: 11/9 MBS / Treasuries UMBS 30YR 5.0 98.81 +2.06 Price / Yield Change MBS UMBS 5.0 98.81 +2.06 UMBS 5.5 100.66 +2.00 GNMA 5.0 99.27 +1.92 GNMA 5.5 101.05 +1.88 Pricing as of: 11/10 5:31PM EST 10 Year US Treasury 3.8162 -0.2828 Price / Yield Change US Treasury 2 YR Treasury 4.336 -0.246 5 YR Treasury 3.941 -0.303 7 YR Treasury 3.881 -0.291 10 YR Treasury 3.816 -0.283 30 YR Treasury 4.055 -0.217 Pricing as of: 11/10 5:31PM EST Latest Video Inflation is much lower than the Fed thinks, says Wharton Professor of Fina... Lennar, Icon can complete one 3D-printed house every two weeks Inflation data takes Fed tightening into 'fine-tuning' phase, says Jefferie... Monetary policy must continue to tighten, says Esther George, KC Fed presid... Around the Web CNBC Mortgage rates fall sharply to under 7% after inflation eases CNBC Consumer prices rose 0.4% in October, less than expected, as inflation eases Calculated Risk Blog Housing and Inflation CNBC Fed officials welcome inflation news but still see tighter policy ahead Calculated Risk Blog Weekly Initial Unemployment Claims increase to 225,000 Eye on Housing Unsurprisingly, Housing Affordability Continues to Fall Calculated Risk Blog MBA: "Mortgage Delinquencies Decrease to New Survey Low in the Third Quarter of 2022" Calculated Risk Blog Cleveland Fed: Median CPI increased 0.5% and Trimmed-mean CPI increased 0.4% in October Reuters Fed's Kashkari: talk of pivot 'premature,' on good policy path CNBC Peak inflation in Europe 'is almost within reach,' European Central Bank member says Reuters ECB to lend out more of its bonds to ease market squeeze CNBC Treasury yields dip ahead of consumer inflation report The Basis Point Core inflation measure Fed focuses on down to 6.3% in Oct from 6.6% Sept peak. Should help mortgage rates.

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