POST TAGSMarket Updates
Blog posted On June 12, 2023
Similar to the week prior, mortgage rates showed minimal volatility last week. A potential cause could be the market’s prediction that the Federal Funds Rate is nearing a plateau. In other words, the markets are predicting that the Federal Reserve will NOT hike the benchmark interest rate this Wednesday or at subsequent meetings in 2023. Of course, this will largely depend on economic data like jobs reports and inflation. This week we’ll get news from the consumer price index (CPI) about inflation in May. The following day is when the Fed is scheduled to make a decision about the benchmark rate.
If inflation hits the predicted mark, then it’s likely the Fed will not hike. If inflation comes in hotter than expectations, it’s possible the Fed hikes the benchmark rate another 0.25%. Should be an interesting week!
Currently, experts are predicting May’s CPI will come in at 0.2%, which would be a 0.2% drop from April’s inflation levels. Annual inflation is expected to fall to 4.2%, a 0.7% drop from April. A downward inflation trend would be beneficial for the bond market and as a result, beneficial for rates.
Last month, the Federal Open Market Committee (FOMC) voted to hike the benchmark interest rate by another 0.25%. If all goes accordingly this week, we could see the Fed’s first ‘skip’ in over a year. If you want to learn more about market movement and how it affects your rates, let us know!
Sources: Mortgage News Daily,