January Consumer Price Index higher than markets expected

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Published Date 2/13/2024

Today's Mortgage Rate Summary

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up.

Rates Currently Trending: Higher

Mortgage rates are moving higher today. The MBS market worsened by -7 bps yesterday. This was not enough to increase mortgage rates or fees. The market experienced low volatility yesterday.

Today's Rate Forecast: Higher

Inflation: The January Headline CPI data with the new weighted calculations (seasonal adjustments released last week) showed a MOM increase 0.3% of versus estimates of 0.2% and a YOY gain of 3.1% versus estimates of 2.9%. Core CPI (ex food and energy) a pace of 0.4% versus 0.3% on a MOM basis and 3.9% versus 3.7% on a YOY basis.

Optimism: The NFIB Small Business Optimism Index dropped in January from 91.9 down to 89.9 and was well below estimates of 92.4.

Today's Potential Rate Volatility: High

This morning markets are moving higher on the inflation data. Volatility has started high as markets digest the data.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Source: TBWS

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

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All rates, fees and programs are subject to change without notice.