Producer Price Index better than expected

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Published Date 11/15/2022

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: Neutral

Mortgage rates are moving slightly lower today. The MBS market worsened by -30 bps yesterday. This was enough to increase mortgage rates or fees. The market experienced high volatility yesterday.

Today's Rate Forecast: Neutral

Manufacturing: We got a welcome upside surprise in the NY Fed District as their Nov Empire State Manufacturing Index was back in positive territory for the first time since July. It came in at +4.5 vs. est. of -5.0

Inflation: October headline Producer Price Index (final demand) was much lighter than expected, rising by 0.2% on a MOM basis vs. est. of 0.5%. YOY, it was up 8.0% which is still very ugly but its better than forecasts of 8.3%. Core (ex food and energy) PPI was flat (0.0) on a MOM basis vs. est. of 0.4%, YOY it was up 6.7% vs. est. of 7.2%

The Fed: Today we will hear from Cook and Harker.

Today's Potential Rate Volatility: Neutral

This morning markets are mostly treading slightly better. Volatility has started at moderate to high levels with the PPI 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.