A strong reading in the Consumer Price Index is putting upward pressure on mortgage rates this morning. With rates continuing to move higher, we believe the best option for many borrowers is to lock in a rate soon on a purchase or refinance. It only takes a few minutes to get started, so take action today toward your ideal home financing situation. Read on for more details.
Market Outlook 2.12.18 from Total Mortgage on Vimeo.
Where are mortgage rates going?
CPI pushes rates higher
We got arguably the most significant economic report of the week out this morning with the Consumer Price Index reading for January. Analysts had called for a monthly rise of 0.3%, but the actual reading came in slightly above that at 0.5%.
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With one of the leading theories for last Monday’s stock market turbulence being an uptick in inflation reflected in the rise in average hourly earnings, there was a lot of anticipation that a rise in inflation in today’s report could have a similar effect.
Looking at the market today, stocks did fall immediately after the release of CPI but have since moved back up to above where they started the day. Long-term Treasury yields also had an immediate reaction to the CPI reading, jumping up by several basis points.
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The yield on the 10-year Treasury note (the best market indicator of where mortgage rates are going) is now up to 2.87%. That’s very close to the week’s high of 2.89% hit during early trading on Monday.
The implication here for financial market participants is that the Federal Reserve might be moving more towards four rate hikes in 2018 than the three rate hikes that have been expected.
Rate/Float Recommendation
Lock in a rate soon
Long-term Treasury yields have moved back up near multi-year highs, putting upward pressure on mortgage rates. With rates continuing to move higher as the year progresses, it only makes sense to lock in a rate sooner rather than later.
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Today’s economic data:
Consumer Price Index
CPI came in above expectations for January with a monthly rise of 0.5% compared to the 0.3% analysts had called for.
Retail Sales
Retails sales fell 0.3% in January. Retail sales less autos remained unchanged. The less autos and gas reading fell 0.2%.
Atlanta Fed Business Inflation Expectations
The Atlanta Fed Business Inflation Expectation for February came in at 2.0%.
Business Inventories
Business inventories are up 0.4% for December.
EIA Petroleum Status Report
For the week of 2/9/18:
- Crude oil: 1.8 million barrels
- Gasoline: 3.6 million barrels
- Distillates: -0.5 million barrels
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Notable events this week:
Monday:
- Nothing
Tuesday:
- NFIB Small Business Optimism Index
- Fedspeak
Wednesday:
- Consumer Price Index
- Retail Sales
- Atlanta Fed Business Inflation Expectations
- Business Inventories
- EIA Petroleum Status Report
Thursday:
- Jobless Claims
- Philadelphia Fed Business Outlook Survey
- PPI-FD
- Empire State Mfg Survey
- Industrial Production
- Housing Market Index
Friday:
- Housing Starts
- Import and Export Prices
- Consumer Sentiment
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from Total Mortgage Blog http://ift.tt/2BXj2T1
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