POST TAGSMarket Updates
Blog posted On May 08, 2023
Mortgage rates fluctuated last week but ultimately trended lower than the week before. They initially inched downward due to more banking drama that sent bond yields lower. Following the banking drama, the scheduled Job Openings and Labor Turnover (JOLTs) on Tuesday showed that job openings were lower than expected in March. Fewer job openings are a good sight of economic tightening, which typically sends bonds and rates lower. On Wednesday, the Federal Reserve raised the benchmark interest rate another 0.25%, which was widely expected by the markets. Less expected was the language shift in the Fed’s statement that suggests it will be easing up on rate hikes soon. This was more good news for interest rates. Friday, however, unloaded stronger-than-expected employment situation reports, which sent rates slightly higher, but not higher than the previous week.
More potential for volatility is coming up this Wednesday with the release of April’s consumer price index (CPI) – the most popular gauge for inflation. “CPI is the biggest market mover among the various inflation reports that come out each month,” writes Mortgage News Daily COO, Matthew Graham. “Every new update on inflation is particularly interesting right now because the market is actively trying to determine if inflation in check and declining, or if it is persistent enough as to require more rate hikes from the Fed. This indecision is what the consolidation pattern in mortgage rates is all about.” The most important number within the CPI is the core CPI, which excludes food and energy costs. The target core inflation level is 2% annually. Right not, the core CPI is around 5.5%. The monthly levels have been around 0.3%. It would take 12 months of core CPI at 0.167%.
Stay tuned for more market updates!